Archive | Tower

Published 13 September 2012

Tower Ltd today said today it was considering a number of proposals with interested parties after completing its strategic review.

The shares lost 5c after the announcement. They’d got down to $1.76 on 5 September but had climbed to $1.85 yesterday. Asset backing is 1.48/share. Guinness Peat Group plc holds 34.988% of the company.

Group managing director Rob Flannagan said the board felt the share price didn’t reflect Tower’s strength when the company had achieved strong financial results and strengthened operational efficiency.

While Tower had outperformed the New Zealand market since its separation from Tower Australia in 2006, he said the board felt more shareholder value could be created.

“To this end the board is open to changing Tower’s business structure to improve the value achieved for shareholders and is considering proposals, including operational alliances & divestment of assets. At this point, there is no expected outcome from the exercise and any such transactions would need to make sound business sense before being progressed.”

Mr Flannagan said announcements about the propositions being investigated would be made if they represented realistic options for the company. Senior management undertook the review, supported by Goldman Sachs and overseen by the board.

Mr Flannagan said Tower expected the processes with interested parties to be completed by the annual meeting next February. Until then, the focus was on business as usual.

Tower chairman Bill Falconer, whose term expires next February, has decided to step down now to enable a new chairman to implement the initiatives emanating from the strategic review. Independent director Steve Smith, appointed in May, has been named interim chairman.

Mr Flannagan said the process of board renewal was ongoing and the company was well resourced to assess & implement the opportunities flowing from the strategic review while actively managing its business operations.

Mr Falconer told the 2012 annual meeting in February the company had come through last year’s Christchurch earthquakes with a $33.4 million profit for the September 2011 year, down from $58.1 million in 2010. But he said that, since demutualisation, “it has forfeited scale and become an operator across all the major insurance categories, whereas the competition tend to be larger specialist insurers, as Tower used to be.

“Addressing these issues is a primary task of the board, and we would not rule out the disposition (American word for disposal) of assets as well as acquisitions in the interests of improving the positioning of the company in the market, and securing optimal returns for shareholders on their capital. I am conscious that we raised capital from shareholders 2 years ago to enable us to pursue value-creating opportunities which would provide scale for Tower. With nothing immediately on the horizon, a capital repatriation will be addressed as part of this work.”

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

Published 27 September 2009

Tower Ltd’s rights issue closed 47% oversubscribed on 23 September. Group managing director Rob Flannagan said total applications of $119.85 million, but the maximum offer amount of $81.3 million of shares would be issued. The new shares are expected to be issued on Monday 28 September. Mr Flanagan said the takeup under entitlements, at $74 million, fell 9% short of the maximum, but oversubscription for the $7.3 million balance of shares available totalled $45.8 million.  

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Attribution: Company statement, story written by Bob Dey for the Bob Dey Property Report.