Bain Capital has made a $2.68 billion $4-a-share indicative acquisition proposal bid for wealth manager Insignia Financial (ASX: IFL).
Insignia announced the bid on 13 December referring to “media speculation on 12 December in relation to a potential takeover from Bain Capital”.
The company confirmed that, after market close on 12 December, it had received from Bain a confidential, preliminary, non-binding and indicative proposal to acquire all its shares by way of a scheme of arrangement.
Insignia said the indicative proposal was subject to conditions including satisfactory conclusion of exclusive due diligence and unanimous recommendation from the Insignia board to vote in favour of the deal, in the absence of a superior proposal and subject to an independent expert concluding the transaction was in the best interests of Insignia shareholders.
Any transaction would also be subject to approval by the Foreign Investment Review Board (FIRB) and the Australian Prudential Regulation Authority (APRA).
Insignia said its board, with its financial and legal advisers, was considering the proposal to assess whether it was in the best interests of shareholders to engage with Bain.
Media reports on 11 December that Bain was to bid for Insignia sent share price up from $3.04 to $3.41 on 12 December. The shares closed at $3.61 on 13 December after Insignia confirmed Bain’s approach.
Insignia, which has $228 billion in funds under advice, is in the early stages of a turnaround strategy under chief executive Scott Hartley who has previously led AMP and SunSuper. Hartley said at a November investor day that he expects to cut the company’s annual outgoings from $950 million at present to $800 million by 2028.
Insignia has come under criticism from large investors, including Tanarra Capital, for its failure to adequately integrate major acquisitions, primarily MLC which it bought in May 2021. MLC is one of Australia’s largest corporate superannuation businesses.
On 10 December, Insignia announced it had entered into an initial agreement with global technology and fund administration business SS&C Technologies to simplify its master trust superannuation business into a single platform, a process that it expects to result in improved customer experience and cost efficiencies. A binding final agreement is expected to be completed during the first quarter of 2025.
Under the deal, technology and more than 1,000 staff, will be transitioned from Insignia to SS&C.
Insignia’s multiple master trust programs serve more than a million individual members.
Insignia changed its name from IOOF in 2021. The business evolved from a friendly society, the Independent Order of Oddfellows, established in Melbourne 1846. Under its wealth management services, the company provides financial advice, superannuation, wrap platforms and asset management services to individuals, financial advisers and corporate employers.