Tower cancels trust sale
Tower Limitedhas abandoned plans to sell its personal and corporate trustee businesses in Australia and New Zealand and plans to use them as part of a growth strategy, claiming it as the best use of shareholder capital.
According to Tower a number of groups had approached the group and carried through the due diligence process and made bids but it says due to recent changes in its management and structure as well as a loss in this financial year the group had decided not to move ahead with the sale.
Rather the group has indicated it would review some of the changes it has undertaken and announce the results of this review early next year.
The original move to sell the trustee business was made in July this year when Tower announced it would either sell the business or dilute its ownership with any deal expected to be concluded by the end of October.
The decision not to sell the trustee business contradicts that of the Boston Consulting Group who made an evaluation of the Tower Group and concluded that the full ownership of the personal and corporate trustee businesses was not in keeping with the future plans for the group.
Tower says the trust business is profitable and will continue to contribute to the group’s retail and wholesale relationships despite the fact the group’s previous managing director James Boonzaier said at the time the sale was announced that it was consistent with a strategy that called for a stronger place in wealth management.
Boonzaier also said the divestment was necessary as Tower Limited could no longer serve an increasingly wide financial services market and had to concentrate on providing services in areas which offered the most promise.
However the current chief executive Keith Taylor has stated the reason for the turnaround was that the bids did not meet what the Tower thought the business was worth and he regarded the trustee business as being a closer fit with wealth management than his predecessor.
AUTHOR
Jason Spits
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