Tower split puts shareholders first
Tower Limited’s decision to completely separate its Australian and New Zealand operations was done to provide shareholders with the best returns possible, according to Tower Group managing director Jim Minto.
“We’ve been looking for a variety of ways over time to improve value for its shareholders. As we’ve looked at this option we believe it’s a way that will create good value for shareholders in the long run,” Minto said.
The two companies that will emerge from the move will be Tower Australia and Tower New Zealand Limited.
“We believe that the market would prefer or would like to see specialisation in Tower’s business, with an opportunity to invest more cleanly either into a specialist life business in Australia or a group of businesses in New Zealand that have quite different investment characteristics. So by separating Tower this way we’re going to give future investor more choice,” Minto explained.
He said this would improve the organisational structure, as the two businesses already operate independently of one another and there were no real synergies between the two along product lines.
While Minto described Tower’s Australian operation as a specialist life risk business, he emphasised the company’s commitment to the other products they were offering to the market, such as the Beacon investment platform.
“Our intention is to hold on to that. In Australia we have a niche investment business and we see that as absolutely core to our future and we want to grow that and make it very successful,’ Minto said.
The de-merger is still subject to shareholder approval and will be carried out in conjunction with a rights issue by Tower Australia Group Limited. Under the initiative, existing shareholders will receive shares in both operations, with the split likely to be around 65 per cent with the Australian arm and 35 per cent in the New Zealand business.
The rights issue is scheduled to be completed in December.
The new structures will see Minto become chief executive of Tower Australia Group, with John de Zwart as the operation’s new chief financial officer. The appointment to the chief executive role of the New Zealand business has not yet been confirmed.
Recommended for you
The corporate regulator has announced its first adviser banning of the year with the permanent ban of a Queensland-based former adviser that was sentenced to seven years’ imprisonment.
The Australian financial advice industry has risen by more than 20 advisers this week, with nearly half joining WT Financial and Sequoia.
Two financial advice professionals have shared their tips for success when building an effective Professional Year program as more advisers look to bring on junior staff to their practices.
Numbers are in for 2024, with Wealth Data confirming how many advisers left during the calendar year and which business models saw the largest growth in terms of new licensees.
