The two parties increased their bids from $4.60 per share to $5.00 per share, a rise of 8.7 per cent, which represents a 63 per cent premium to the closing price of Insignia shares on 11 December.
Insignia said the terms of each proposal are attractive for Insignia shareholders, and that it has entered into exclusivity deeds with both parties. Further due diligence is expected to be completed within six weeks, the firm said.
The firm did not detail the outcome of the third bid from Brookfield which was received later in the bidding process, matching Bain and CC Capital’s bids at $4.60.
Announcing the firm’s half-year results last month, chief executive Scott Hartley said it was likely multiple parties would be considered for the second stage and that he was hopeful of expediting the M&A process, having provided bidders with information on strategy, the SS&C deal, and on finance.
Each proposal is subject to various conditions including:
- Satisfactory completion of the due diligence noted above on Insignia Financial and its business.
- A unanimous recommendation of the board of Insignia Financial and a commitment from all Insignia Financial directors to vote in favour of the applicable proposal, in the absence of a superior proposal and subject to an independent expert concluding that the applicable proposal is in the best interests of IFL shareholders.
- Agreement of a scheme implementation deed with Insignia Financial on customary market terms.
- Final investment committee approval from either Bain or CC Capital (as applicable).
There is no certainty that either proposal will result in any transaction being put forward to shareholders.
For its half-year results in February, the firm announced a statutory net loss after tax of $17 million. However, the firm said this is an improvement from a loss of $50 million in the prior corresponding period, thanks to cost optimisation measures enacted during the period.
Average funds under management and administration (FUMA) increased by $25 billion to $320 billion, an increase of 8.6 per cent. Net revenue was up 1.5 per cent driven by strong markets.
