Australian financial services group Insignia Financial Ltd has rejected a $2.7 billion takeover bid from American private equity giant Bain Capital.
Insignia Financial said it had carefully considered the indicative proposal, including obtaining advice from its financial and legal advisers, and believed it did not adequately represent fair value for shareholders in the context of a change of control transaction.
Insignia also said it was not in the best interests of IFL shareholders to engage with Bain Capital in relation to the proposal.
“IFL shareholders are not required to take any action in relation to the indicative proposal,” Insignia said in an ASX announcement.
Bain Capital, which also owns Australia’s second largest airline Virgin Australia, last week made an indicative proposal to pay $4 cash per Insignia share under a scheme of arrangement.
The proposal is subject to conditions including completion of exclusive due diligence, execution of a binding implementation agreement, unanimous board recommendation, and a commitment from directors to vote in favour of it.
At 12.10pm (AEDT) Insignia (ASX: IFL) shares were trading below the bid price at $3.55, down 5 cents (1.4%) from the previous close, having risen from $3.09 before the bid was announced on 13 December but down from a day’s peak of $3.72 the same day. The company has a market capitalisation of $2.4 billion.
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