Insignia Financial Ltd (ASX: IFL) shares are jumping on Friday morning.
At the time of writing, the ASX 200 share is up 9% to a 52-week high of $3.72.
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Why is this ASX 200 share jumping?
This morning, Insignia Financial responded to media speculation by confirming that it has received a takeover offer.
Insignia Financial, formerly known as IOOF Holdings, is a leading Australian wealth manager. It provides financial advice, superannuation, wrap platforms, and asset management services to members, financial advisers, and corporate employers.
According to the release, after the market close on 12 December, the ASX 200 share received a confidential, preliminary, non-binding and indicative proposal to acquire it by way of a scheme of arrangement from private equity firm Bain Capital.
The company revealed that under the terms of the indicative proposal, Insignia Financial shareholders would receive $4.00 cash per share. This represents a 17.6% premium to where the ASX 200 share closed yesterday's session and values the company at approximately $2.68 billion.
Though, this offer would be adjusted for any dividends paid or payable after the date of the indicative proposal.
Insignia Financial advised that the indicative proposal is subject to a number of conditions. This includes satisfactory completion of due diligence on an exclusive basis, execution of a binding scheme implementation agreement, approval of Bain Capital's Investment Committee, unanimous recommendation from the Insignia Financial board, and commitment from all directors to vote in favour of the transaction. This is in the absence of a superior proposal and subject to an independent expert concluding that the transaction is in the best interests of shareholders.
The company also notes that any transaction would, if entered into, be subject to the approval of the Foreign Investment Review Board (FIRB) and the Australian Prudential Regulation Authority (APRA).
What's next?
The Insignia Financial board advised that, together with its financial and legal advisers, it is considering the indicative proposal to assess whether it is in the best interests of shareholders to engage with Bain Capital.
It also warned that there is no certainty that the indicative proposal will result in a binding offer or that any transaction will eventuate.
As a result, the ASX 200 share has advised that shareholders do not need to take any action in relation to the indicative proposal at this stage. The company will continue to keep the market informed in accordance with its continuous disclosure obligations.
