Insignia shares’ rollercoaster ride during M&A bidding war
Having peaked at more than 40 per cent growth since the first bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
The first bid for the financial services firm was made six months ago on 12 December by Bain Capital when Insignia shares were trading at $3.40.
At the time, the $4 cash per share bid from US private equity firm Bain represented a 30 per cent uplift on Insignia’s share price and valued the company at $2.7 billion.
In the months that followed, Insignia shares rocketed as the bids rose higher and higher and peaked at $4.83 on 7 March when Bain Capital and CC Capital increased their bids from $4.60 to $5 cash per share.
The $4.83 share price represented 42 per cent growth since the first bid in December and 98 per cent growth from the share price a year prior.
The $5 bid from the two firms increased the company’s valuation by 22 per cent from the original valuation up to $3.3 billion.
However, after Brookfield and Bain Capital exited the process and left CC Capital as the last bidder standing, shares have largely fallen back to where they began at the start of the process.
As of 13 June, shares in Insignia are trading at $3.51, just 3 per cent higher than they were in December.
However, shares have risen by 61 per cent over 12 months to 13 June compared to 10.3 per cent by the ASX 200.
Regarding the current state of the M&A process, Insignia directed Money Management to its ASX statement on 14 May when it said it remained in discussion with CC Capital.
“Insignia Financial remains in discussions with CC Capital, which has advised that it continues to actively work towards making a binding bid for the company over the coming weeks. There is no certainty that the ongoing discussions will result in any transaction being put to Insignia Financial shareholders for their consideration,” it said.
With CC Capital’s last bid being $5 per share, there is a possibility it could look to reduce this price now that it is the only bidder as it would represent a 42 per cent uplift on the current share price.
AUTHOR
Laura Dew
Recommended for you
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Private market secondaries manager Coller Capital has unveiled a new education platform to improve advisers’ and investors’ understanding of secondaries.
Investors in Australia have among the highest return expectations in the world, according to Natixis Investment Managers, targeting double-digit growth above inflation from their portfolios.
