Tower announces ownership structure review
In a surprising announcement, New Zealand-based insurer Tower has declared a strategic review of its ownership structure.
The announcement came as a surprise because just 11 days ago, there were no indications of such a review or the need for it in the insurer's 2022-23 annual results. These results were dominated by the adverse financial impacts from the storms, floods, and heavy rain that affected New Zealand, parts of Australia, and the Pacific throughout the year, especially in the first quarter.
Tower informed exchanges on both sides of the Tasman that the review, "supported by 20% shareholder Bain Capital," will explore "options to maximise value for all Tower shareholders and optimise its capital structure to provide a strong platform for market competitiveness."
Goldman Sachs New Zealand Limited has been brought in as a financial adviser to assist with the strategic review.
Michael Stiassny, Chairman of Tower, stated in a Monday press release, "In our commitment to delivering long-term value to our shareholders, we believe that a thorough examination of our ownership structure is prudent at this time. This strategic review will enable us to explore options that align with our objectives and position us for continued success in the marketplace."
Tower offers a range of insurance products, including home, contents, and motor vehicle coverage across New Zealand and the Pacific.
The company reassured shareholders and stakeholders that business operations will continue as usual during the review process.
"The Board will not comment further on the strategic review until the process is completed, which is expected to take several months. No decisions will be made regarding any potential transaction or other outcome until the completion of the process," the statement concluded.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.