GPG role in Tower deal draws flak
The ongoing deal to recapitalise theTowergroup has hit further turbulence with the New Zealand-based Hanover Group criticising the role of the Guinness Peat Group (GPG) as underwriter.
GPG was yesterday confirmed as the underwriter for the $185 million recapitalisation despite its own rights issue proposal being knocked back by Tower last week.
Last week Tower, which is looking to reduce its more than $400 million of debt obligations, opted for the alternative recap proposal put to it by First New Zealand Capital and Credit Suisse First Boston on the basis that it was a “fairer” option for all shareholders. The two groups were major backers of a rejected Hanover underwriting proposal but would be included as sub-underwriters in the GPG scheme.
However Hanover, which holds 4.6 per cent of Tower, has made a complaint to the NZ Takeover Panel with chief executive Kerry Finnigan stating the group was concerned with the level of influence it felt GPG had put on the Tower board.
The action is not the first by Hanover in this matter which last week complained to New Zealand Stock Exchange Market Surveillance Panel (MSP) and sought an injunction to stop last Friday's shareholder meeting to remove a 10 per cent cap on individual shareholdings. Both actions were not successful.
The Takeovers Panel is looking into a number of issues raised by Hanover but would not provide further information regarding the issues or any possible action it is likely to take.
The MSP argues GPG may only move to a 13.75 per cent holding as it was underwriting the recapitalisation deal.
Finnigan says despite the MSP not upholding Hanover’s complaints it was likely to approach Tower about a possible sub-underwriting role. GPG andJB Were, the organising broker, have until Friday to compile a panel of sub-underwriters, which will in turn be approved by Tower.
AUTHOR
Jason Spits
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