By Scott Murdoch and Shivangi Lahiri
SYDNEY (Reuters) – Shares in Insignia Financial jumped to a three-year high on Monday after it revealed a A$2.87 billion ($1.78 billion) takeover offer from U.S. investment manager CC Capital Partners (WA: ), eclipsing Bain Capital’s A$2.67 billion bid.
The deal would give CC Capital access to Australia’s $4.1 trillion pension system, considered one of the world’s largest private pension markets.
The 178-year-old Australian money manager, previously known as IOOF, rejected an approach from private equity firm Bain Capital in late December, saying the offer did not give fair value to its shareholders.
Insignia shares rose 11% to A$3.93 a share in early trading, hitting their highest level since 2022, but remained below the cash offer of A$4.30 a share. Insignia said its board of directors is reviewing CC Capital’s proposal to assess whether it is in the best interests of its shareholders.
Insignia Financial said CC Capital’s non-binding offer offered a 7.5% premium to Bain Capital’s offer and a 21.5% premium to Insignia’s last closing price of A$3.54 on Friday.
CC Capital was founded nearly a decade ago by Chinh Chu, who was Blackstone’s (NYSE: ) former co-head of private equity, according to the company’s website. If successful, the deal would be the New York-based company’s first major investment in Australia.
Insignia provides pension insurance, financial consulting and asset management services. At the end of September, it had A$319.6 billion in assets under management.
The transaction will give traders hope that the recovery in corporate buyout activity Down Under 2024 will extend this year.
M&A activity in Australia totaled $113.4 billion in 2024, according to LSEG, up 15% from 2023. Inbound M&A from overseas buyers jumped 23% in the year compared to a year earlier, data show.
“Insignia’s board may demand a higher premium given the company’s significant role in Australia’s superannuation industry, but whoever is the buyer will not only need to please the board and shareholders, but also regulators to close the deal,” Stella Ong said. , market analyst. on the Superhero stock trading platform.
“With Insignia’s P/E still trailing AMP (OTC: ), this may not be the last offer we see,” she said, referring to rival Australian investment manager AMP.
CC Capital’s offer requires Foreign Investment Review Board approval and prudential regulatory approval, Insignia said.
CC Capital did not immediately respond to a request for comment. Bain Capital declined to comment.
($1 = 1.6108 Australian dollars)
