(Reuters) – Australia’s Insignia Financial has rejected Bain Capital’s A$2.67 billion ($1.69 billion) takeover bid, saying the offer does not provide fair value to its shareholders, creating a barrier for the buyout giant’s Asia expansion plans.
Bain had earlier in the month offered A$4 apiece for the 178-year-old money manager, reigniting a strong sense of investor appetite for Australia-listed wealth managers that have recently seen their asset bases grow strongly.
However, Insignia turned down the Boston-based investment firm’s offer on Wednesday, saying it “does not adequately represent fair value for IFL shareholders.”
After the offer was tabled, brokerage Sandstone Insights said a A$4.50-A$5 per share bid would generate “more serious attention from the board.”
Bain Capital has also been active in Japan, making improved offers for Fuji Soft amid a bidding war with rival KKR .
Bain completed the final close of its fifth pan-Asian private equity fund at $7.1 billion in November last year. It also struck a deal to acquire Australian aged care operator Estia Health for A$838 million in August.
KKR’s A$2.2 billion deal with Australia’s Perpetual also hangs in the balance after a tax bill blowout.
The Australian wealth management sector has recently seen some mergers and acquisition activity. Hedge fund Regal Partners had made an offer for Platinum Asset Management in September, but the buyout talks did not bear fruit.
Insignia rejected Bain Capital’s bid as it moves ahead with a strategy to restore confidence among shareholders, having already faced resistance from activist investor Tanarra Capital.
Bain Capital did not immediately respond to Reuters’ request for comment.
($1 = 1.5785 Australian dollars)
