Tower Says New Zealand Commerce Commission Won't Clear Takeover Bid

By David Winning Features Dow Jones Newswires

General insurer Tower Ltd. (TWR.NZ) said the New Zealand Commerce Commission won't support a takeover offer by Suncorp Group Ltd. (SUN.AU) valuing it at about 236.1 million New Zealand dollars (US$175.1 million).

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On Wednesday, Tower said it doesn't yet know the reasons why the regulator intends to block the deal with Suncorp's Vero Insurance New Zealand Ltd. unit.

"Tower will work with Vero to assess the implications for the Vero scheme, but it will mean a shareholder vote will now no longer occur in early September," it said in a regulatory filing.

Suncorp in February trumped a NZ$1.17 a share bid from Canada's Fairfax Financial Holdings Ltd. (FFH.T), offering NZ$1.30 and acquiring an initial 11.1% stake in Tower. It lifted that to 19.9% by mid-March, although it paid NZ$1.40 each for the subsequent shares.

In late June, Suncorp said it would offer NZ$1.40 a share in cash for all outstanding shares after completing due diligence. Tower's directors subsequently recommended the deal, paving the way for a shareholder vote.

Suncorp wants to acquire Tower to consolidate its position in New Zealand's general insurance market by creating a business with gross written premiums of NZ$1.6 billion and generating value through reduced costs.

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-Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

July 25, 2017 17:02 ET (21:02 GMT)