On January 6, Insignia’s price rose to its highest level in three years after CC Capital Partners announced a $1.8 billion bid. Recently, Insignia declined a $1.66 billion bid from Bain Capital, saying it wasn’t a fair price for their shares. The takeover bid would give CC Capitals access to Australia’s A$4.1 trillion superannuation system, one of the largest world pension markets.
Last December, Australia’s money manager declined the approach of private equity firm Bain Capital, saying it wouldn’t be fair to deal on the offered price for their shareholders. On Monday, Insignia shares gained by 11% raising prices to $2.44 per share, reaching their highest recorded price since 2022. The company said that board members were assessing CC Capital’s proposal if it was in the interest of shareholders.
CC Capital Makes Bold Bid for Insignia Financial
Insignia Financial reported that CC Capital made a non-binding bid offer of a 7.5% premium compared to Bain Capital’s offer. The US-based investment bank made a 21.5% premium offer to Insignia’s last closing price of $2.2 per share. Chinh Chu, Blackstone’s former co-head of private equity, created CC Capital decades ago.
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 Financial Buyout – Impact on Australia’s Market
According to LSEG data, Australian M&A activity reached $113.4 billion in 2024, marking a 15% increase from 2023. Inbound deals from foreign buyers surged by 23% over the same period.
Stella Ong, market analyst at Superhero, noted that Insignia’s board may seek a higher offer due to the company’s importance in Australia’s superannuation sector. However, the buyer will need to satisfy not only the board and shareholders but also regulators to secure the deal.
“Insignia’s forward P/E is still lower than that of AMP, so this may not be the final offer,” she said, referring to AMP, a competing Australian investment manager. CC Capital would require approval from the Foreign Investment Review Board and prudential regulatory approval for its offer.
Insignia Stock Update
Since 2022, Insignia stock prices have seen one of the highest gains by 11%. The prices are expected to rise amid the biddings for all the shares of the company. On Monday, the share prices closed at $2.44 per share.
