Insignia Financial receives second takeover bid
Insignia Financial has received a second takeover bid to acquire 100 per cent of the company.
At the end of last year, the firm received a bid from US private equity giant Bain Capital to acquire 100 per cent of the company. This was later rejected by the board who felt it was not fair value for shareholders.
It has since announced that the firm received a confidential, non-binding and indicative proposal from New York-based firm CC Capital Partners on 3 January.
This would be to acquire all of the shares in Insignia Financial by way of a scheme of arrangement at a price of $4.30 cash per share. The $4.30 offer is 7.5 per cent higher than the $4.00 per share originally offered by Bain Capital.
The proposal is expressed to be subject to a number of conditions including satisfactory completion of due diligence on an exclusive basis and execution of a binding scheme implementation agreement.
The scheme implementation agreement, if entered into, would be conditional on (among other things) a unanimous recommendation from the Insignia Financial directors and commitment from all directors to vote in favour of the transaction, in the absence of a superior proposal and subject to an independent expert concluding that the transaction is in the best interests of Insignia’s shareholders, and approval from CC Capital’s investment committee
Insignia said it is “considering the proposal” to assess if it is in the best interest of shareholders and that there is no certainty that it will result in a transaction proceeding.
Following the Bain Capital bid last year, M&A experts told Money Management it was highly likely a rival bid would be made by another player.
James Chown, financial services M&A partner at Deloitte, said: “It’s been rumoured that there has been PE interest in Insignia for a long time. The board obviously needs to evaluate the opportunity and what that means for shareholders, and then there might be flow-on consequences for other participants in the market as a result.
“Whether it was Bain or someone else, there’s been rumours about it for a while with different funds looking at it.”
Tony Beaven, financial services M&A expert, said: “If Bain puts in an offer and it’s rejected, they will just come back with another offer because they have already done the due diligence and the work. It’s going to be in the US newspapers now, so other firms will likely look at it too. They are gathering intelligence all the time.”
AUTHOR
Laura Dew
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