Recasts first sentence with bidding war, adds details of offer, company background, paragraphs 2-4 and 7

Jan 13 (Reuters) - Australia's Insignia Financial IFL.AX said on Monday that private equity firm Bain Capital has sweetened its bid for the 178-year-old wealth manager, now valuing it at A$2.87 billion ($1.76 billion), matching CC Capital's bid as the bidding war heats up between the two suitors.

Under the offer, Insignia shareholders will receive A$4.30 per share, a 7.5% premium to Bain Capital's earlier offer.

Earlier this year, U.S.-based investment manager CC Capital Partners offered to buy Insignia for A$2.87 billion, days after Insignia had rejected Bain Capital's original takeover offer, saying it did not provide fair value to its shareholders.

The Australian wealth manager said that under the revised offer, Bain Capital would also be open to providing Insignia shareholders an option to receive a part of the total purchase price as a scrip consideration in the ultimate Bain Capital-controlled holding entity of Insignia Financial.

Bain Capital's revised offer reflects a strong sense of investor appetite for Australia-listed wealth managers whose asset bases have grown strongly.

The deal would give access to Australia's A$4.1 trillion superannuation system, which is considered one of the world's largest private pension markets.

CC Capital did not immediately respond to a request for comment.

($1 = 1.6279 Australian dollars)

(Reporting by Rajasik Mukherjee in BengaluruEditing by Diane Craft and Matthew Lewis)

((Rajasik.Mukherjee@thomsonreuters.com;))