Insignia Financial (ASX: IFL) has refuted a report in The Australian newspaper speculating that Brookfield was “actively weighing a bid” for the company.
In a 10 January ASX announcement, Insignia said it had not received any proposal from Brookfield. The announcement was authorised by chief executive Scott Hartley.
Insignia is currently considering how it should respond to a $2.884 billion, $4.30-a-share, indicative offer from New York private equity firm CC Capital.
The offer, announced on 6 January, came just weeks after Insignia had rejected a $4-a-share indicative offer from Bain Capital.
Insignia is considering whether to grant CC Capital exclusive due diligence.
Insignia has said CC Capital’s offer was subject to conditions including satisfactory completion of exclusive due diligence, approval from CC Capital’s investment committee and Insignia entering into a binding implementation agreement for its acquisition via a scheme of arrangement.
Were Insignia to agree to a deal with CC Capital, any transaction would still need to be approved by the Foreign Investment Review Board (FIRB) and the Australian Prudential Regulation Authority (APRA).
Insignia has engaged Citigroup and Gresham Advisory Partners as financial advisers and King & Wood Mallesons as legal adviser.
Insignia, which has $228 billion in funds under advice, is in the early stages of a turnaround strategy under chief executive Scott Hartley who had previously led AMP and SunSuper. In November, Hartley said he expected 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 which holds a 15.2% stake in Insignia through its Long Term Value Fund, 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.
Tanarra, however, supported Insignia’s decision to reject the Bain Capital offer.
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.
CC Capital was founded in 2016 by former senior Blackstone executive Chinh Chu. The firm specialises in the use of special acquisition companies (SPACs) to acquire businesses. In 2019 Chu led a take-private acquisition of the US business of global credit reporting agency Dun & Bradstreet. Dun & Bradstreet was re-listed on the New York Stock Exchange in 2020. Current CC Capital portfolio companies include global investment technology and advisory business Wilshire which CC Capital acquired in 2021.
Image: Insignia chief executive Scott Hartley.