TOWER Life sale rumours increase

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Fidelity Life is believed to be on the verge of buying its rival TOWER Life, with reports that a deal is due any day.

Thursday, January 17th 2013, 4:54PM 1 Comment

by Susan Edmunds

Good Returns first reported that Fidelity was looking at TOWER last year.

It would be a revenge of sorts for Fidelity, which received a hostile takeover offer from Tower in 2010. The failed bid valued Fidelity at $118 million, equating to $82 per share. Since then, its share price has remained above $90 and now sits at $95.

Rumours have been rife that TOWER was on the cusp of selling more of its assets since it sold its medical insurance business to Australian firm nib in November for $100 million.

TOWER interim chairman Stephen Smith said in its most recent annual report that the group was looking at the options.

He said the board was considering proposals for a merger, divestment or operational alliances. “Our goal is to determine an outcome from these ahead of the next Annual Shareholder Meeting.”

It is understood Fisher Funds and a number of Australian banks are eyeing TOWER’s investment and KiwiSaver business. TOWER is a default fund for the savings scheme.

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