Tower shares jump

By NZPA

Friday 20th December 2002

Shares in embattled financial services company Tower jumped 12 percent today after broker JB Were went hunting last night for around 5 percent of the company, brokers said today.

Tower has been seen as a takeover target since its stock slumped around 55 percent following a profit warning.

There were over six million shares traded by 9.30am with the share price rising 21 cents to $2.01.

Brokers speculated that Guinness Peat Group, AMP or the private company Active Equities, run by former Brierley Investments executives, could be the buyer.

Forsyth Barr Frater Williams broker Richard Burton said JB Were fell short of its target. It was attempting to buy stock at $1.90/share. It purchased around 5 million at $2.00/share off market last night.

He said JB Were was still bidding for the stock.

"There have been no announcements or anything so we don't really know what's going on."

Yesterday, Tower announced it had appointed the acting head of its Australian unit, Jim Minto, to the job of chief executive of the unit. Tower posted a net loss of $74.95 million earlier this month, including a $35.8 million writedown on the value of its Australian master trust business, Bridges Financial Services.

A week later, Tower continued its push into the Australian market with the purchase of a 16 percent stake in Mawson Group Australia.

Tower chairman Colin Beyer recently said he believed the true value of the company was well over $4/share and hinted that the company could be a takeover or break-up target.

He said it was a dominant force in New Zealand and "it may be that one or two of our businesses in New Zealand are worth a lot more to others than they are to us".

Mr Beyer also said at the loss announcement that the company expects to appoint a new chief executive by the end of the calendar year.

The company has been without one since James Boonzaier stood down in July after 12 years at the helm. Mr Beyer has largely blamed Mr Boonzaier for many of the company's current woes.

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