Another US firm eyes Insignia takeover with $2.9bn offer

Insignia Financial has received a second takeover bid to acquire 100 per cent of the company.

At the end of last year, the firm received a bid from US private equity giant Bain Capital to acquire 100 per cent of the company, which was later rejected by the board.

It has since announced that the firm received a confidential, non-binding and indicative proposal from New York-based firm CC Capital Partners.

This would be to acquire all of the shares in Insignia Financial by way of a scheme of arrangement at a price of $4.30 cash per share. The $4.30 offer is 7.5 per cent higher than the $4.00 originally offered by Bain Capital. The CC Capital offer would come in at around $2.9 billion in total.

The proposal is expressed to be subject to a number of conditions including satisfactory completion of due diligence on an exclusive basis and execution of a binding scheme implementation agreement.

The scheme implementation agreement, if entered into, would be conditional on (amongst other things) a unanimous recommendation from the Insignia Financial directors and commitment from all directors to vote in favour of the transaction, in the absence of a superior proposal and subject to an independent expert concluding that the transaction is in the best interests of Insignia’s shareholders, and approval from CC Capital’s investment committee.

Insignia said it is “considering the proposal” to assess if it is in the best interest of shareholders and that there is no certainty that it will result in a transaction proceeding.

In an ASX statement in December, Insignia said the board had “carefully considered the terms of the indicative proposal” from Bain, 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.