The Insignia Financial Ltd (ASX: IFL) share price is up 5% today (and up 15% in two days) after receiving a takeover bid.
Insignia Financial describes itself as a leading Australian wealth manager. It provides financial advice, superannuation, wrap platforms and asset management services to members, financial advisers and corporate employers. It was previously called IOOF.
Takeover offer
Yesterday, there was media speculation that Insignia Financial had received some takeover interest from Bain Capital.
In an ASX announcement today, Insignia Financial confirmed that it had received a takeover offer from Bain Capital after the market closed on 12 December 2024. This offer was described as preliminary, non-binding and an indicative proposal to buy the whole of Insignia Financial.
If the takeover is accepted, shareholders would receive $4 cash per share, adjusted for any dividends paid or payable after the date of the indicative proposal.
There are a number of conditions attached to the offer, including satisfactory completion of due diligence on an exclusive basis, approval by Bain Capital’s investment committee, unanimous recommendation from the Insignia Financial board of directors and commitment from all directors to vote in favour of the transaction (as long as there isn’t a superior proposal and it’s also subject to an independent expert concluding a takeover is in the best interests of shareholders).
If the two parties do enter into a transaction, the deal would be subject to the approval of the Foreign Investment Review Board (FIRB) and the Australian Prudential Regulation Authority (APRA).
Initial reaction
The board of Insignia Financial, as well as its financial and legal advisers, is considering the indicative proposal to assess if it is in the best interests of shareholders to engage with Bain Capital.
The ASX financial share noted that there is no certain the indicative proposal will result in a binding offer or that any transaction would eventuate.
The company said shareholders do not need to take any action and it will continue to keep the market informed.
Final thoughts on the Insignia Financial share price
It will be interesting to see if this deal goes ahead. The market doesn’t seem convinced it will, with the share price being more than 10% below the offer price.
If I were a long-term shareholder, I wouldn’t choose to sell yet because if the offer is turned into an accepted takeover the share price could rise closer to the offer price.
In terms of making an investment, there are other ASX dividend shares I’d rather buy than Insignia today.