By Rishav Chatterjee

() -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 seen their asset bases grow strongly.

Insignia’s shares are currently trading 0.3% lower at A$3.59, well below Bain’s per share bid, after having slipped 2.8% during the session.

Insignia turned down the Boston-based investment firm’s offer on Wednesday, saying it “does not adequately represent fair value for shareholders.”

“The ball is now in Bain’s court to either up the bid and give a reason to say yes or they can walk away,” said Henry Jennings, senior market analyst at marcustoday newsletter.

“I would say that somewhere above A$4.20 per share would be enough to get them talking.”

Bain has also been active in Japan, making improved offers for Fuji Soft amid a bidding war with 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 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. Regal Partners had made an offer for Platinum Asset Management in September, but the buyout talks failed.

Insignia rejected Bain’s bid as it moves ahead with a strategy to restore confidence among shareholders, having already faced resistance from activist investor Tanarra Capital.

“We regard the Bain proposal as highly opportunistic. We want the Insignia management team to remain focused on the business improvement plan they are in the early stages of delivering,” Tanarra said on Tuesday.

($1=1.5785 Australian dollars)