The Insignia Financial Ltd (ASX: IFL) share price has soared 11% after receiving larger takeover offers.
Insignia has received previous takeover bids from various parties that want to buy the financial services business.
Takeover bids of $5 per share
The business announced to the ASX that it has received separate non-binding proposals from private equity players Bain Capital and CC Capital to buy the whole business.
Both bidders submitted offers of $5 cash per share, adjusted for any dividends paid or payable after the dates of the proposal.
After looking at both offers, the board decided the terms of each proposal are attractive for Insignia Financial share owners and it’d be in the best interests to enter into exclusivity deeds with both Bain and CC Capital to further progress their proposals.
Both parties will have access to confirmatory due diligence which is expected to be completed within six weeks.
The offer of $5 represent an increase of 8.7% from the offer of $4.60 per share that both private equity parties had lobbed previously.
$5 is a 63% premium to the closing Insignia Financial share price on 11 December 2024 of $3.06. That was the last trading day before the company received an offer from Bain.
Conditions apply
Both proposals are subject to conditions including completing satisfactory due diligence to ensure the company is what the bidders think they’re buying.
There should also be an unanimous recommendation from the Insignia board and that directors will vote in favour of the proposal, assuming there isn’t a better bid.
It’ll also require final investment committee approval from either Bain or CC Capital.
Investors in Insignia Financial shares will need to approve the deal, as well as APRA and FIRB.
Final thoughts on Insignia shares
Shareholders don’t need to do anything at this stage, but the share price is still 5% below the offer price, though it’s possible neither offer will progress. But, one of the bidders may also increase their bid to win.
It’ll be interesting to see what happens next.
