On January 13, Insignia Financial reported that Bain Capital had matched CC Capitals’ $1.8 billion takeover offer, intensifying a bidding competition for an Australian company. According to reports, Insignia received an updated cash proposal of roughly $2.64 from Bain on January 11, 2025.
Bain Capital’s action came a few days after Insignia announced that it was being targeted for a takeover by CC Capital Partners, a private investment firm led by former Blackstone dealmaker Chinh Chu. Earlier, Bain offered A$4.00 per share of Insignia, which has increased by 7% to compete with CC Capitals. Bain Capital has also offered to provide equity to Insignia shareholders in the ultimate holding entity if the deal is completed.
Bain’s Bid to Take Over Insignia
On Monday, Insignia confirmed that it is considering the bidding offers from both Bain Capital and CC Capital. As of September, Insignia Financial managed about A$320 billion in funds. The company, which employs around 4,000 people, reported an annual net loss in August, partly due to costs related to its transformation and remediation efforts.
Insignia’s margins have been squeezed by the high costs of merging two bank wealth businesses it acquired. However, last week, Morgan Stanley analysts upgraded the stock and raised their price target to A$4.40 per share, citing stronger earnings from rising markets and the long-term potential for Insignia to thrive in a wealth sector left by the banks.
Bain Capital’s Takeover Bid
Almost a month earlier, Insignia declined a $1.66 billion bidding offer from Bain Capital saying that the price wasn’t fair for its shares. Later, CC Capital proposed an offer of $1.8 billion which was under consideration by Insignia Financial. CC Capital was giving $2.2 per share which was still lower than the closing price of $2.44 of Insignia’s shares.
However, if the deal becomes successful, it will be CC Capital’s major investment in Australia. Insignia provides asset management services, superannuation, and financial advice. In September 2024, the company had $198.5 billion of funds under management and administration. The deal offers optimism for dealmakers, suggesting that the growth in corporate buyouts in Australia in 2024 could continue into this year.
Insignia’s Stock Update
After announcing Bain Capital’s offer, Insignia’s stock gained by 2.5% offering at the share price of A$4.45. Insignia’s board is reviewing both offers with help from its financial advisers, Citigroup and Gresham Advisory Partners, as well as legal adviser King & Wood Mallesons. The board noted that there’s no guarantee either bid will lead to a final deal or binding offer.
