Insignia Financial opens books for US suitor’s $3 billion takeover offer

Wealth manager Insignia Financial has opened its books to US suitor CC Capital but suggested it is holding out for an even higher bid.

The takeover target said on Monday it had given CC Capital a limited period of due diligence after evaluating the company’s sweetened $3.1 billion cash offer of $4.60 a share.

CC Capital, the investment arm and family office of former Blackstone executive Chinh Chu, lifted its initial offer of $4.30 last week after fellow US private equity group Bain Capital matched the proposal.

“In order to determine if CC Capital is able to formulate a further improved proposal ... Insignia Financial has offered to provide to CC Capital a limited period of access to certain non-public information on a non-exclusive basis,” Insignia said.

Shares in Insignia were 1.5¢ higher at a fresh three-year high of $4.44 as at 11.10am.

Insignia said the due diligence to CC Capital was conditional on the usual confidentiality agreement.

“The provision of limited due diligence does not guarantee that the CC Capital revised indicative proposal will result in a binding offer or one that is capable of being recommended by the board of Insignia Financial,” it said.

It promised to keep investors informed in accordance with its continuous disclosure obligations, but it “will not otherwise be commenting on the process that is now underway with CC Capital”.

The company, formerly known as IOOF Holdings, manages superannuation accounts and provides financial advice under platforms including MLC and Plum.

Both Bain and CC Capital have flagged enabling Insignia shareholders to take some of their offers in shares in the private equity groups’ bidding vehicles to keep exposure to the wealth manager’s business.

Mr Chu founded CC Capital in 2016. The group has invested in companies including Dun & Bradstreet, Getty Images, software firm E2open and salty snacks maker UTZ Brands.

Foreign buyers are showing increased interest in Australian wealth managers because of the latter’s access to the world’s fourth-biggest and one of its fastest-growing pools of superannuation, now valued at $4.1 trillion.

Insignia holds about $180b in superannuation assets it holds, ranking it third behind AustralianSuper and Australian Retirement Trust.

Founded in 1846 as the Independent Order of Oddfellows to help working families, IOOF changed its name to Insignia in 2021 after being castigated over customer failures by the banking royal commission.