Forum Archive Index - November 2002

["mvanv" <mvanv@xtra.co.nz>]

It appears Tower managment have decided to tidy up their books in one sweep.This may turn out OK for medium and long term shareholders if they getall of their writedowns out of the way now and do not surprise again next year , As things look at the moment there will be no div. payment and a loss of  $88 m  assuming they write down the Bridges operation as well followed by a return to profit next year.

 

Assuming a loss of $88 m which equates to  50c per share (175 m shares)the current NTA  of $5.13 will be reduced to $4.60

NTA is fairly irrelevent unless a company is a takeover target.

 

In recent months two insurance/financial services companies have built up a stake in Tower

AXA Asia Pacific Holdings Ltd   7.19%

Perpetual Trustees Aust. Ltd.    9.99%

Commonwealth Bank is a long term shareholder with 5.9%

 

Tower has a 10% cap which restricts other companies from owning more than 10% of tower shares. This cap will be removed in Oct. next year. Both AXA  (market cap 4.2 bn) and PPT (market cap 1.7 bn) are financially strong and appear to be positoining

themselves to have a bid for Tower. Tower will hopefully have all it's writedowns behind it and being profitable again, it will be a very attractive target.

 

I am assuming again (correct me if i,m wrong) that a financial services company will sell at a  premium to NTA  ($4.60)

 

This all sugests to me that people selling their tower shares for $2.00 are not looking very far ahead.

 

 

  disc.  hold TWR

 

Mike