Brookfield drops out of boosted $3.4b Insignia bidding war - AFR

Canada’s Brookfield has pulled out of the $3.4 billion private equity bidding war for storied wealth management firm Insignia Financial after being out-gunned by rival bidders Bain and CC Capital.

Bain and CC lodged separate $5 per share offers for near 180-year-old institution formerly known as IOOF on Friday morning, an increase of about 10 per cent to their earlier all-cash $4.60 proposals. It secured them a four-week head start against Brookfield on due diligence after Insignia’s board promised it would not shop a deal with other suitors until the start of April.Insignia shares jumped 12.9 per cent higher at the open to $4.81.

The final offer from either Bain or CC is likely to be made within the next six weeks, the Insignia board told investors in a statement, and it will not recommend any binding deal lower than the existing $5 offer price from the pair. Senior executives from the New York-based CC Capital flew into Sydney over the past few weeks to discuss the deal with Insignia’s board.

“After careful consideration, the board has determined the terms of each proposal to be attractive for Insignia Financial shareholders,” the board said in a statement to the ASX. “Both [will get] parties access to confirmatory due diligence that is expected to be completed within six weeks.”

People briefed on the discussions, who requested anonymity as they were not authorised to comment, said Brookfield did not think the economics behind a $5 bid made sense for it and had stopped working on a proposal.

Insignia shares jumped 12.9 per cent higher at the open to $4.81.

Shareholders have agitated for a $5 price tag for several weeks. Perth-based Indian Pacific Funds Management, overseen by managing director Preston Hamersley, said last month that anything below $5 was opportunistic.