Following a drawn-out negotiation process and just one day after Insignia announced it was awaiting a final bid from CC Capital, the two firms have entered a scheme of arrangement, albeit at a lower price than previously offered.
In a statement, the firm said CC Capital has agreed to a cash consideration of $4.80 per share, which values the company at $3.3 billion.
This is slightly below the $5 bid that both CC Capital and rival bidder Bain Capital had made, which withdrew from the process last month, before the due diligence period. However, it represents a 56.9 per cent premium to Insignia’s closing share price of $3.06 on 11 December.
Insignia acknowledged that CC Capital had conducted a “lengthy and comprehensive due diligence process”, which had begun in March. This was expected to last for six weeks, but continued into July.
The Insignia board unanimously recommended that its shareholders approve the move, adding that it is subject to various conditions being met.
If so, the move is expected to be implemented in the first half of the 2026 calendar year. In certain circumstances where the deal fails to succeed, a break fee or reverse break fee is payable of $33 million.
“The decision to recommend this offer follows extensive work by the board and its advisers to understand the medium-to-long term value of the company, with the board concluding that the offer should be put to shareholders for their consideration,” said Insignia Financial chairman Allan Griffiths.
Chief executive Scott Hartley added that the offer recognises Insignia’s “underlying value”, along with the firm’s vision to become Australia’s “leading and most efficient wealth management company by 2030”.
“We are and will continue to be focused on executing against our strategy and delivering for our customers and shareholders,” Hartley said.
Separately, the firm announced its quarterly flows for the fourth quarter of FY25, which showed funds under management and administration (FUMA) increased by $8.5 billion to $330.3 billion, up from $321.7 billion in the previous quarter.
This was divided between $102.9 billion in wrap, $135.2 billion in master trust and $92.2 billion in asset management.
Total net inflows were $2.1 billion, driven by flows of $1.2 billion into MLC Expand, $483 million into multi-asset management and $583 million into institutional direct asset management.
On its wrap division, it said FUA was $102.9 billion, an increase of $5.2 billion over the quarter, which was driven by positive market movement and net underlying inflows of $1.2 billion but offset by pension payments of $707 million.
In asset management, FUM decreased by $2 billion to $92.2 billion as a result of derecognition of $4.8 billion to be divested, partially offset by underlying positive market movement of $1.8 billion and net inflows of $1 billion.
Net inflows into multi-asset products stood at $483 million across its MLC MultiSeries, Index Plus Fund and its managed account solution.
