An eight-month contest for Insignia Financial is close to being concluded with the financial services company accepting a takeover bid from New York-based private equity firm CC Capital Partners that values it at A$3.3 billion (US$2.2 billion).
Insignia said its Board recommended that shareholders approve the $4.80 per share offer from the only bidder remaining after investment giants Bain Capital and Brookfield dropped out of the running.
The company said the consideration under the scheme of arrangement represented a 56.9% premium to its undisturbed closing share price of $3.06 on 11 December 2024, the last trading day before Bain lodged a non-binding indicative proposal.
Chairman Allan Griffiths said the recommendation followed extensive work by the Board and its advisers to understand the medium-to-long term value of the company, which provides financial advice, superannuation, wrap platforms and asset management services to members, financial advisers and employers.
“This offer recognises the underlying value of the Insignia Financial business, our associated brands including MLC, and our vision to become Australia's leading and most efficient wealth management company by 2030," Chief Executive Officer Scott Hartley said in an ASX announcement.
The Board unanimously recommended that shareholders vote in favour of the scheme in the absence of a superior proposal, and subject to an independent expert concluding it was in the best interests of shareholders.
It is also subject to conditions, including approvals from shareholders, the Australian Prudential Regulation Authority, Foreign Investment Review Board and the Australian Competition and Consumer Commission, and the courts.
Bain pulled out in May when it withdrew its offer of $5 cash per share, which matched CC Capital's non-binding offer, Brookfield having left the race when the asking price was at lower levels.
An explanatory booklet will be sent to shareholders around the time of receipt of regulatory approvals in relation to the Scheme and before the scheme meeting, which is to be held on a date to be fixed.
Insignia was rebranded in 2021 by IOOF Holdings Ltd, an organisation that traces its origins back to the Independent Order of Odd Fellows (IOOF), a friendly society established in 1846 in Melbourne during the gold rush.
At the time of writing Insignia (ASX: IFL) shares were trading up 48 cents (12.34%) at $4.42, capitalising it at $2.99 billion.
