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).
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.
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"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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(END) Dow Jones Newswires
July 25, 2017 17:02 ET (21:02 GMT)