CC Capital delights Insignia Financial with $4.60-a-share counter offer, trumping Bain Capital

US investment firm CC Capital has underlined its intent with a $3.1 billion counter offer for wealth manager Insignia Financial, bidding clear of rival suitor Bain Capital.

Insignia on Friday revealed CC Capital had increased its initial cash offer by 30¢ a share to $4.60, putting another $200 million on the table for delighted Insignia shareholders.

The revised, non-binding proposal pushes CC Capital beyond Bain own counter offer of $4.30 on Monday and tests the private equity giant’s interest in Insignia, which manages superannuation accounts and provides financial advice through investment platforms including MLC.

Shares in Insignia, formerly known as IOOF Holdings, leapt 6 per cent on the news to a more than three-year high of $4.42.

Bain’s opening offer of $4 a share was rejected by Insignia’s board in mid-December as too low, prompting CC Capital to sound out the Australian company two weeks ago with its own proposal.

The Insignia board’s focus has now switched to the higher proposal, though it is still giving little away.

“The board of Insignia Financial, together with its financial and legal advisers, is considering the revised indicative CC Capital proposal,” Insignia said.

“There is no certainty that the ... proposal will result in a binding offer or that any transaction will eventuate.

“IFL shareholders do not need to take any action at this time.

“Insignia Financial will continue to keep the market informed in accordance with its continuous disclosure obligations.”

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

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

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. It has about $320b under management.

Bain has been an active player in Australian investment circles for some time, with its most notable deals including the buyout of airline Virgin Australia in June 2020.

By comparison, CC Capital is chasing its first Australian acquisition. The New York-based group is the investment arm of former Blackstone executive Chinh Chu, which he established in 2015.