My late father’s superannuation was invested in insurance bonds with what was then IOOF. As a result, when IOOF demutualised circa 2002, my mother got 2715 shares in that company. At some point in recent years, they changed their name to Insignia Financial, and two years ago, they sold their insurance bond business off to Australian Unity.
So currently, the only link that my family has to what used to be known as IOOF is that small shareholding in Insignia Financial.
Given that I attend the annual general meetings now that I am retired, I have much opportunity to pay attention to this company which formerly had great significance to my family.
Two years ago, when the share price had dwindled to $2, there was barely a peep from the bemused shareholders. Last year, when the share price had risen to $3, there was significant anger, given that the dividend had been suspended for the financial year. [Some of the books I read 30 years ago when I was first teaching myself about the share market advised to sell immediately when a company stopped paying a dividend.]
One shareholder went back through several years of recent annual reports and quoted the identical language and repeated promises of improvement which had gone unfulfilled.
I can understand the anger. The share price has spent at least two prolonged periods in the past 20 years above $10, including around 2005 and then again around 2015. Just like AMP, another demutualised local financial institution, they have been an investor’s horror story.
My own attitude, when the news broke earlier this year that there was a takeover bid for Insignia, was that it could not happen soon enough. Let’s all cash in what we can get and move on. When it emerged that there were three companies bidding for IFL, and that the prospective price was $5, I was mildly delighted. That meant my family could disengage from IFL in its current form for good (my mother does not have a share trading account obviously, so we would have to wait for the takeover to come to fruition).
Today, Bain Capital (sounds like a Batman villian) has announced it is withdrawing its bid due to volatility in global financial markets. I expect that the other suitors will either withdraw their bids or revise them downwards. The IFL share price is subsequently down this morning from $4 at close last night to $3.41 – that is quite a spectacular fall.
So what should I do? Do I want to put some skin in the game directly and buy some shares in IFL myself, or just watch and see what develops?
Lost For Words! 