CC Capital close to lobbing binding offer for Insignia Financial

Insignia Financial chief executive Scott Hartley. Picture: John Feder

CC Capital is understood to have locked in leveraged finance groups to fund its bid for the $2.6bn listed financial company Insignia.

Shares in Insignia Financial on Thursday closed up 2 per cent, or 9c, to $3.94, which implied that its investors were expecting that the private equity firm would stump up the money for an offer over $4 a share.

News of a binding offer from the group is expected any day, with sources saying ahead of last weekend it remained “fully engaged” when it came to work on a buyout proposal.

The $2.6bn company had flagged at the start of the month it was expecting an offer in a fortnight’s time.

Earlier this month, Insignia said CC Capital had told the company it was working towards making a binding bid and was finalising financing.

Insignia chief executive Scott Hartley has close ties to CC Capital.

CC Capital joined the contest for Insignia on January 3 by offering $4.30 per share, then lifting the bid on January 17 to $4.60 per share cash.

Bain Capital, Brookfield and CC Capital all offered $5 a share to gain due diligence, but Brookfield and Bain have fallen away and there are doubts CC Capital would offer the same amount now.

CC Capital was once interested in buying the MLC business from NAB – which was bought for $1.4bn in 2020 by Insignia Financial.

It will be interesting to see if management recommends a lower offer, and if it does, what the independent expert report will make of it.

Regardless, there’s chatter that a number of influential shareholders on the register are ready to take a deal and move on after showing years of patience with the company.

Insignia has significantly underperformed its financial peers on the ASX and has more recently been in the rebuilding phase.

Insignia provides a range of financial services including advice, investment management, superannuation and estate and trustee services.

It was previously called IOOF and came under the spotlight in the royal commission into the financial services industry over its corporate governance and conflicts of interest.

Its performance also suffered from years of bolt-on acquisitions that were not adequately integrated into the overall business.

Some have been sceptical about how committed CC Capital was to buying Insignia.

Should suitors fall away, AMP could have an interest in the company, but the question would be how it would fund a transaction at a time that its bank remains a drain on its capital.

Mr Hartley also previously worked at AMP as its head of Australian wealth management.