Insignia Financial has received a $2.9 billion bid from New York-based private equity firm CC Capital just weeks after a deal from Bain Capital was rejected.
In an announcement made to the ASX on Monday morning, Insignia disclosed it has received the indicative, non-binding proposal for CC Capital to acquire the company at a price of $4.30 per share.
The offer comes less than a month after Insignia received a non-binding offer from Bain Capital for $2.7 billion, after the market closed on 12 December 2024. The offer was quickly rejected as Insignia said the share price “does not adequately represent fair value” for its shareholders.
CC Capital’s proposal represents a 7.5 per cent premium to Bain Capital’s offer of $4 per share, and a 39.2 per cent premium on its closing share price of $3.09 before the Bain offer.
While CC Capital isn’t a widely known name in Australian deal making and has never acquired an Australian public company, it is no stranger to wealth acquisitions and investments.
CC Capital was founded by Chinh Chu, former co-chair of Blackstone, in 2015 and has acquired companies through the creation of special purpose acquisition companies (SPACs) spearheaded by Chu.
CF Corp, its first SPAC, raised US$1.2 billion ($1.93 billion) in order to acquire Fidelity and Guaranty Life. CC Capital also acquired Wilshire Associates in 2020.
Furthermore, CC Capital and Insignia have crossed paths before. The Australian Financial Review Street Talk column reported in 2020 that CC Capital was in the running for MLC Wealth when it was owned by big four bank NAB.
Insignia, then still known as IOOF before its rebranding, beat CC Capital in the auction for MLC. Only a few years later, CC Capital is aiming for Insignia itself. Insignia’s board now has time to weigh up the options. Whether Insignia shareholders are willing to accept the proposal or if Bain wants to match CC Capital’s offer will be revealed in due course.
The proposal is subject to several conditions including satisfactory completion of due diligence on an exclusive basis and the execution of a binding scheme implementation agreement.
The agreement would be conditional (among other things) on “a unanimous recommendation from the Insignia Financial board of 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 IFL shareholders) and approval from CC Capital’s investment committee”.
Additionally, any further transactions would be subject to approval by the Foreign Investment Review Board and the Australian Prudential Regulation Authority.
As with Bain Capital’s offer, the Insignia Financial board is assessing whether entering into a transaction with CC Capital is in the best interest of shareholders.
The second offer for Insignia in a month – whose share price has struggled to rebound since the Hayne royal commission when it was valued at over $10 per share – comes just as Insignia chief executive Scott Hartley reaches close to his one-year anniversary in the job.
Hartley took over the position last year, replacing Renato Mota, and was presented with the challenge of turning around the company’s fortunes.
After taking over the position, he announced Insignia would undergo a corporate restructure which involved the appointment of three AMP executives, including Renee Howie as chief marketing officer.
Insignia also completed the separation of MLC Wealth from National Australia Bank, following its acquisition under Mota in 2021.
