Two of Insignia Financial’s bidders, Bain Capital and CC Capital, have raised the stakes in their quest to acquire all of Insignia Financial.
The two private equity firms have submitted revised indicative non-binding proposals, leaving the third, Brookfield Capital Partners, behind in the dust.
In an update to the ASX before the market opened on Friday morning, Insignia revealed Bain and CC Capital’s new proposals have an increased share price of $5 cash per share.
It marked an increase of 8.7 per cent from the previous offers of $4.60 cash per share which they both submitted along with Brookfield.
However, Brookfield has not raised its original offer and is, at least for now, out of the running now as Insignia’s board has determined the revised proposals as sufficiently “attractive for Insignia Financial’s shareholders”.
The board has concluded it would be in the best interests of the shareholders for Insignia to enter into an “exclusivity deed” with the firms to further progress both proposals and will provide the firms access to confirmatory due diligence, which is expected to be completed within six weeks.
The new offer of $5 per share represents a premium of 63 per cent to the closing price of Insignia Financial shares of 11 December 2024 of $3.06, the last trading day before Bain Capital kicked off the bidding war with its original proposal.
It also represents a premium of 56 per cent to the average price of Insignia’s shares for the month up to and including 11 December.
Bain Capital was the first private equity firm to submit an indicative non-binding proposal of $4, which was swiftly rejected back in December 2024 due to the bid not adequately representing fair value for shareholders.
At the beginning of the year, CC Capital followed up with a proposal of $4.30 per share, totalling $2.9 billion to Bain’s rejected $2.7 billion, only for rival Bain to match it soon after with the additional possibility of allowing Insignia shareholders to remain invested in the company.
CC Capital upped the ante with an offer of $4.60 per share, valuing Insignia at just over $3 billion. Bain was hot on its heels with another matching bid, its third since the original offer was rejected.
Brookfield joined the bidding war in February with the same offer as the other two parties, despite Insignia having previously refuted the claim made in The Australian that it was “working on a potential tilt at Insignia”.
Friday’s dual proposals are subject to conditions including satisfactory completion of due diligence, a unanimous recommendation of the board and commitment from all Insignia directors to vote in favour, in the absence of a superior indicative proposal, and subject to an independent expert to confirm the proposal is in the best interest of the shareholders.
There must also be an agreement of a scheme implementation deed with Insignia on customary market terms and final investment committee approval from the applicable firm.
As with all previous proposals, there is no certainty that either will result in any transaction put to the shareholders for consideration.
