Yesterday’s increased bid for the shares of Tower Insurance of New Zealand has won the race to acquire the firm for Australia and New Zealand based insurer Suncorp Group.
Suncorp has now officially beaten Prem Watsa’s Fairfax Financial to the acquisition of Tower, as the increased bid per share significantly outshone the competition’s offer.
Suncorp responded a week later, as its subsidiary Vero Insurance New Zealand Limited acquired 11.14% of the ordinary shares in Tower, and took a position in the market to take up to 19.9% of the shares in Tower, while making a non-binding proposal to acquire the remaining 88.86% of ordinary shares at a price of NZ$1.30 per share, which was above the price offered by Fairfax.
Then yesterday, Suncorp said that after completing due diligence on Tower, its subsidiary Vero NZ has revised its offer and that Tower shareholders would now receive cash consideration of NZ$1.40 for each share held.
This morning Suncorp announced that its Vero New Zealand subsidiary has entered into a Scheme Implementation Agreement (SIA) where by Vero will acquire the remaining Tower ordinary shares that it does not own for NZ$1.40.
Tower said that the offer from Suncorp’s Vero is a “superior proposal to the existing Fairfax Scheme” and that Fairfax has decided not to increase its offer for the insurer.
The agreement values Tower somewhere around NZ$235 million. The acquisition terms will now go to a shareholder vote.
