Insignia Financial has rejected a proposed takeover from US private equity giant Bain Capital that would have paid Insignia shareholders $4 cash per share, placing the bid at $2.7 billion.
In an ASX statement on Wednesday morning, Insignia said the board had “carefully considered the terms of the indicative proposal”, including obtaining financial advice from Citigroup and Gresham Advisory Partners, and legal advice from King & Wood Mallesons.
However, it decided $4 per share was not sufficient.
“The Insignia Financial Board believes that, based on its view of the fundamental value of Insignia Financial, the proposed transaction does not adequately represent fair value for IFL shareholders in the context of a change of control transaction and that it is not in the best interests of IFL shareholders to engage with Bain Capital in relation to the indicative proposal,” Insignia said.
“IFL shareholders are not required to take any action in relation to the indicative proposal.”
Last week, Insignia announced it had received the “confidential, preliminary, non-binding and indicative proposal” to acquire all of the shares in Insignia Financial by way of a scheme of arrangement, with the firm saying it was “considering” the offer.
“The board of Insignia Financial, together with its financial and legal advisers, is considering the indicative proposal to assess whether it is in the best interests of shareholders to engage with Bain Capital. There is no certainty that the indicative proposal will result in a binding offer or that any transaction will eventuate,” it said at the time.
Following the announcement, Insignia shares soared almost 20 per cent from $3.09 per share to a high of $3.70, before settling at its current price of $3.60 per share.
Insignia would be overvalued at $1
The Insignia board destroying shareholder value as usual.