Forum Archive Index - October 2002

["Richard Hooper" <hoop@ihug.co.nz>]

Thxs Harold for the post

In doom & gloom I prick up my ears and listen.....I will  commence to
research Tower as a possible buy......As a long term investor ,one always
buys a solid?? stock in times of negativity.
Cheers
Hoop


----- Original Message -----
From: "Harold J Skinner" <petzl@spamcop.net>
To: <sharechat@sharechat.co.nz>
Sent: Thursday, October 31, 2002 10:18 PM
Subject: [sharechat] TWR Tower - the Melbourne Age Article


> http://www.theage.com.au/articles/2002/10/30/1035683474342.html
>
> Sale rumours put cloud over Tower
> October 31 2002
> By Anthony Hughes
> Sydney
>
> The future of Australia's mid-sized funds managers is again in a state of
> flux, amid talk yesterday that protracted sale negotiations for
London-based
> Royal & Sun Alliance's Australian financial services operations have
> stalled.
>
> Australasian life insurer Tower had been the frontrunner in long-running
> talks to buy the operations, freeing capital for the United Kingdom-based
> life and general insurance group.
>
> But it is believed the sale of the operations, including fund manager
> Tyndall and RSA's life and master trust businesses, will not proceed.
>
> Failure to proceed with the deal puts another cloud over the future of
> Tower, which is still to locate a permanent chief executive and has found
it
> difficult to convince its own shareholders to support such a large
strategic
> move.
>
> It also comes at a time when the value of funds-management groups has
dipped
> in line with weak markets, calling into question the aggressive moves by
> banks to buy wealth-management businesses.
>
>
> One possible outcome of the deal was that Royal & Sun's senior Australian
> executives, including chief executive Michael Wilkins, or head of
financial
> services Dennis Fox, would run the combined entity.
>
> Mr Fox yesterday declined to comment on market speculation but said the
> company was still looking at ways to free capital for the London-based
> parent.
>
> While it was a tough market and there was uncertainty about "who owns
what",
> the group was confident it would see improved wholesale and retail inflows
> to its products, Mr Fox said.
>
> Tyndall, with about $5 billion in funds under management, has been
strongly
> recovering its managed-fund investment performance in the past two years
and
> has been regularly placed among the top three share funds by returns. But
it
> has struggled to attract inflows because of the legacy of earlier years of
> underperformance.
>
> The possibility of a takeover by Tower or another player has also left
many
> investors unwilling to commit money because of the prospect that Tyndall's
> deep value-based style could be altered.
>
> Still, last month Tyndall clawed back some support from research houses,
> when Lonsdale Securities recommended the group's managed funds, citing the
> group's improved investment process under head of Australian equities Bob
> Van Munster. Tower appeared to have been able to come up with a
self-funding
> mechanism for the purchase by securitising parts of the Royal & Sun life
> operations, substantially reducing the purchase price from original
> indications of about $1 billion.
>
> Tower's share price had come under pressure from weak investment markets,
> but also concern that it would have to raise equity capital from
investors.
> Yesterday, it rose 10 cents to $3.10.
>
> Royal & Sun also owns home and car insurer AAMI in Australia, competing
> against Insurance Australia Group and Suncorp Metway.
>
> Last week, Royal & Sun saw its credit ratings put on "negative outlook" on
> concern about its capital position the same issue that has plagued AMP in
> recent months.
>
> The group has said that by November 7 it will decide whether to raise
funds
> by selling stock to underwrite more business next year.
>
>
>
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