Japanese swoop on Tower Australia
Dai-ichi Life Insurance, a 29% shareholder, is offering $A1.2 billion for the rest of the company.
Japan’s second largest life insurer, Dai-ichi Life Insurance, is making a full takeover for Tower Australia Group, once part of Guinness Peat Group (GPG).
The Sir Ron Brierley founded company sold Dai-ichi its 28.9% shareholding in Tower Australia in 2008 for $A376.3 million. That is nearly $A200 million less than what it is worth today.
The $A1.2 billion takeover for 71.1% of the shares, made before the sharemarket in Australia resumed trading today after the Christmas break, is priced at $A4 a share, a 46.5% premium on the closing price before Christmas.
The offer values Tower at $A1.76 billion and is Dai-ichi's first big acquisition since its demutualisation and listing on the Tokyo Stock Exchange in April.
Tower Australia’s shares surged 42% to $A3.88 when trading resumed on the Australian sharemarket. Its independent directors unanimously recommended shareholders accept the offer.
"The independent directors believe that this offer represents a compelling premium and a highly attractive outcome for our shareholders," Tower Australia chairman Rob Thomas said in a statement.
Takeover documents say the offer represents a price-earnings multiple of 19 times, well above the average for the broader market and two other recent deals involving insurance companies.
Dai-ichi’s original buy-in allowed it to appoint two directors to Tower's board. Tower Australia was split from its New Zealand parent in 2006.
Nevil Gibson
Wed, 29 Dec 2011
Wed, 29 Dec 2011
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Japanese swoop on Tower Australia
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