Insignia sale inching closer as rival bidders deliver ‘attractive’ proposals

In an ASX announcement on Friday morning, Insignia Financial revealed that Bain Capital Private Equity and CC Capital Partners have both proposed revised indicative proposals to acquire the company for $5 per share, up 8.7 per cent from the $4.60 they had previously offered.

The jump is enough to get Insignia interested, with the statement saying the firm’s board has determined the terms of each proposal to be “attractive for Insignia Financial shareholders and has concluded that it would be in the best interests of Insignia Financial shareholders that Insignia Financial enter into an exclusivity deed with each of Bain and CC Capital” to further progress their respective proposals.

Under the terms of the deeds, Insignia will provide both Bain and CC Capital access to confirmatory due diligence, noting that the process is expected to be completed within six weeks.

The cash consideration under each proposal, according to Insignia, represents:

• A premium of 63 per cent to the closing price of Insignia Financial shares on 11 December 2024 of $3.06 (being the last trading day prior to announcement of Insignia Financial’s receipt of a proposal from Bain).
• A premium of 56 per cent to the volume-weighted average price of Insignia Financial shares for the one month up to and including 11 December 2024.
• A premium of 77 per cent to the volume weighted average price of Insignia Financial shares for the three months up to and including 11 December 2024.

The proposals remain subject to a range of conditions, Insignia said, including the due diligence process, a unanimous recommendation of the board and a commitment from all directors to vote in favour of the applicable proposal, and final investment committee approval from either Bain or CC Capital.

“In addition, any transaction would, if entered into by IFL, be subject to approval of the Australian Prudential Regulation Authority, the Foreign Investment Review Board, and ultimately, IFL’s shareholders,” it added.

While Insignia noted that there is “no certainty” that either of the proposals will result in a transaction, the announcement is the strongest sign to date that the firm will change hands.

The bidding war for control of Insignia has been ongoing since December, when Bain made its first offer to acquire the company for $4 per share; however, the board decided this figure was not sufficient.

Since then, both Bain and CC Capital have provided bids of $4.30, $4.60, and the latest offers of $5 per share.

Early last month, following weeks of media speculation, a third bidder confirmed it had entered the race, with Brookfield Capital Partners (UK) Limited matching the offers of both Bain and CC Capital.