Bidder drops $3.35bn indicative offer

Bain Capital Private Equity has dropped its $3.35 billion indicative offer for Insignia Financial (ASX: IFL) leaving New York firm CC Capital Partners the only bidder.

Both private equity firms had made revised $3.35 billion indicative offers but, with an extended due diligence period due to expire on 15 May, Insignia announced on 14 May that Bain Capital had pulled out.

“Bain has informed Insignia Financia that it will be unable to proceed at this time with making a binding offer for the company, due to the macro uncertainty caused by the volatility in global capital markets,” Insignia said.

Insignia said it remained in discussions with CC Capital which, it said “has advised that it continues to actively work towards making a binding bid for the company over the coming weeks”.

The news of Bain Capital’s departure sent Insignia’s share price down from $4 to $3.37. The price had been close to $4.70 in early March.

The gap between the share price and CC Capital’s indicative offer suggests the private equity firm will be likely to seek to negotiate a substantially lower price if it proceeds to a binding offer.

CC Capital was founded in 2016 by former senior Blackstone executive Chinh Chu. The firm specialises in the use of special acquisition companies (SPACs) to acquire businesses. In 2019 Chu led CC Capital’s take-private acquisition of the US business of global credit reporting agency Dun & Bradstreet. Dun & Bradstreet US was re-listed on the New York Stock Exchange in 2020. Current CC Capital portfolio companies include global investment technology and advisory business Wilshire which CC Capital acquired in 2021.

Image: CC Capital founder Chinh Chu.