Tower bid ‘vote of confidence’ for NZ market

Tower bid ‘vote of confidence’ for NZ market | Insurance Business

Tower bid ‘vote of confidence’ for NZ market
Suncorp’s takeover bid for New Zealand-based insurer Tower would be a vote of confidence for the New Zealand market, according to the CEO and managing director of a competitor.

Speaking after their results announcement last month, Peter Harmer, CEO and managing director of IAG, noted the impact Suncorp-owned Vero’s acquisition could have on the market.

“In New Zealand, our view is that, if they are successful in their bid for Tower, Suncorp are a very well-managed company, they are a responsible competitor, and we think that would be very stabilising and a vote of confidence in the New Zealand market,” Harmer said.

Last year, IAG were also a rumoured buyer for Tower but Suncorp joined Canadian giant Fairfax with a bid for the firm last month.

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The New Zealand insurer announced its annual shareholder meeting last week with a special meeting set to be called at a later date for shareholders to vote on the competing proposals.

“The Tower board of directors is currently reviewing all options and will provide additional information to shareholders in due course,” Tower said when announcing the meeting, which will be held on March 30.

Vero has acquired 11.4% of Tower shares and submitted a proposal to acquire the remaining shares at a price of $1.30 per share, compared with Fairfax’s bid of $1.17 per share.

For IAG, owner of NZI, AMI, State and Lumley, the acquisition focus is more targeted on Asia, with opportunities to increase stakes in firms in Malaysia and India on the radar, Harmer said.

“We consider ourselves to be ex-M&A here in Australia and in New Zealand,” Harmer continued.

“Certainly, if there were bolt-on acquisitions that didn’t impinge on the competitive positon, we would look at those.”

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