Bain Capital sweetens Insignia Financial bid
The investment firm has lobbed a sweetened $4.30 per share offer for Insignia Financial, matching the bid from rival CC Capital.
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Bain Capital has lobbed a sweetened $4.30 per share offer for Insignia Financial, matching rival CC Capital’s earlier bid as a tug of war for the wealth manager heats up.
ASX-listed Insignia on Monday said it had received the new offer from Bain on January 11th, a month after the suitor’s initial $4 per share bid. This first bid was swiftly rejected by Insignia for undervaluing the business.
The revised offer represents a 7.5 per cent premium to Bain’s original bid and matches the offer put in by CC Capital on January 3.
Alongside the cash offer, Bain said it was open to discussing a transaction structure which would provide Insignia Financial shareholders with an opportunity to receive a proportion of their total consideration as scrip.
“The board of Insignia Financial, together with its financial and legal advisers, is considering the revised indicative proposal in parallel with its consideration of the CC Capital Proposal. There is no certainty that either proposal will result in a binding offer or that any transaction will eventuate,” Insignia said on Monday.
The battle for Insignia is the first major takeover play in Australian markets this year and the third bid by CC Capital Partners for storied wealth manager MLC, which is now a subsidiary of Insignia.
CC Capital Partners lost out to Insignia in a bidding war for MLC in 2021, when it was sold by National Australia Bank for $1.4bn.
NAB had earlier picked up MLC from Lendlease in 2000 in a deal valued at $4.5bn.
Insignia Financial has plans to relaunch the MLC brand this year as part of a five-year strategy.
The matched offer, which values Insignia at $2.9bn, comes after Morgan Stanley last week upgraded the stock to ‘equal weight’ and raised its price target to $4.40 on the longer-term potential for Insignia to establish a profitable footprint in the wealth landscape vacated by the banks.
“But for now Insignia is in outflows, revenue margins are falling and the prolonged costly complexity of integrating two bank wealth businesses is causing a big disconnect between reported and underlying earnings,” the analysts, led by Richard E. Wiles, told clients.
“Insignia is also lagging domestic peers on retirement income product development. We do not expect dividends over the next two years (fiscal 2025 and 2026) given cash constraints from accelerated below the line spending and potential repayment of sub-debt,” they cautioned.
Morgan Stanley is tipping modest 4 per cent to 6 per cent underlying earnings growth for the wealth manager in fiscal 2026 and 2027.
Insignia has engaged Citigroup and Gresham Advisory Partners as its financial advisers and King & Wood Mallesons as its legal adviser.
As previously reported by The Australian, global investment giant Brookfield is understood to be actively weighing a bid for the wealth powerhouse. Insignia on Friday said it had not received any offer from Brookfield.
Insignia opened Monday trade 2.8 per cent higher to $4.24.
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Originally published as Bain Capital sweetens Insignia Financial bid
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