Australia’s Insignia Financial Receives $1.7B Takeover Offer From Bain Capital; shares rise Reuters writes

Author: Aaditia GovindRao

(Reuters) – Australia’s Insignia Financial said on Friday it had received a non-binding cash takeover proposal from private equity firm Bain Capital, valuing the 178-year-old wealth manager at A$2.67 billion ($1.70 billion). in another offer that represents the growing interest in investment managers in the country.

Insignia shares rose as much as 9.6% to A$3.725 by 0043 GMT, their highest level since mid-January 2023. That made it one of the biggest gainers on the benchmark index, which was down 0.6%.

Under the offer, Insignia shareholders will receive A$4.00 per share, representing a 17.6% premium to Thursday’s closing share price of A$3.40.

Shares rose more than 10% in the final 10 minutes of trading on Thursday following local media reports of the offer.

Founded in 1846, Insignia provides financial advice and asset management services. At the end of September, it had $319.6 billion worth of assets under management and administration.

The company’s board of directors is reviewing the proposal to evaluate whether to engage with Bain, the statement said.

Brian Freitas, founder of Periscope Analytics, called Bain’s offer “opportunistic,” noting that Insignia’s stock has underperformed other companies over the past two years.

The offer “could result in rejection by Insignia’s board,” Freitas said in a note on research platform Smartkarma.

In August, the Melbourne-based company swung to a full-year statutory net loss after tax and paused its dividend.

Australian investment managers have received strong bidder interest this year, as evidenced by Bain-rival KKR & Co’s ( NISE: ) A$2.18 billion deal to buy wealth management and corporate trusts business Insignia-peer Perpetual in May.

In September, Platinum Asset Management also received an A$616.5 million bid from hedge fund Regal Partners, which ultimately fell through.

“Given the recent interest in Australian investment/wealth managers, we could see competing offers emerging,” Freitas added.

Bain Capital did not immediately respond to a request for comment.

($1 = 1.5711 Australian dollars)