To bridge the $200 million valuation gap between its rejected offer and CC Capital’s rival proposal to acquire Insignia Financial, Bain Capital has made a revised offer and raised the possibility of allowing Insignia shareholders to remain invested in the company.
In an announcement to the ASX before markets opened on Monday morning, Insignia said it received the revised non-binding and indicative proposal from Bain matching the $4.30 a share price offered by New York-based private equity firm CC Capital, and that the board is considering the offer.
CC Capital’s bid came early in the new year after Insignia had already knocked back Bain’s first offer in December, with both offers now valuing Insignia at $2.9 billion.
While the new Bain offer is pitched at the same 7.5 per cent premium to its original $4 a share offer, it has said it is “open to discussions” about allowing Insignia shareholders the option of receiving a proportion of their total consideration as scrip, meaning investors can retain shares in a Bain-controlled holding entity of Insignia.
The revised proposal is otherwise subject to the same terms and conditions as the initial offer.
“There is no certainty that either proposal will result in a binding offer or that any transaction will eventuate,” the Insignia announcement said, noting no further action is required by shareholders at this time.
The revised offer comes days after Insignia refuted a report in The Australian claiming Brookfield Asset Management was “working on a potential tilt at Insignia”. The wealth firm said it had not received a proposal.
Bain Capital is a private equity spin-off of Boston management consultancy Bain & Company in 1984, which was then led by CEO Mitt Romney, who later became Massachusetts Governor and 2012 Republican US Presidential nominee.
It gained local prominence for its acquisition of Virgin Australia during Covid-19 after the struggling airline had gone into voluntary administration amid border lockdowns and market uncertainty caused by the pandemic.
The latest tussle comes after numerous overseas players entered the Australian wealth market in the wake of changes to the advice landscape stemming from the Hayne royal commission.
US private equity giant KKR took a 55 per cent stake in CFS, acquiring it from big four bank CBA in the aftermath of the royal commission, with the bank retaining 45 per cent.
Italian-based Azimut Group was an early backer of the Paul Barrett-led AZ NGA, which was founded in 2014 before the royal commission, and has since received a $240 million cash injection from US private equity firm Oaktree Capital, which itself is owned by Brookfield.
New York-based Merchant Investment Management joined the Australian market in late 2022 through local partner David Haintz.
The same year, Emigrant Partners took a minority stake in high-net-worth advice firm Koda Capital.