Suncorp increases its bid in Tower takeover

Monday, 26 June 2017

Australian insurance firm Suncorp has increased its offer for New Zealand insurer Tower.

It has added another 10c to the price it is willing to pay, to $1.40 a share.

It already owns almost 20 per cent of the insurance company.

Suncorp, through its New Zealand  business Vero, has competition for Tower, though - Canadian Fairfax Financial Holdings has offered $1.17 a share.

READ MORE: Suncorp cuts jobs in New Zealand

Suncorp's offer has gone to the Commerce commission for clearance - it already operates the Vero and Asteron brands in this country, and is the majority owner of AA Insurance.

In a statement, Suncorp said it had completed due diligence and revised its proposal, which is still subject to approval from the Tower board.

Chief executive Paul Smeaton said the proposed acquisition of Tower provided an opportunity to strengthen the firm's strategic position in the  New Zealand insurance market.

'There is strong strategic rationale for combining the businesses of Suncorp New Zealand and Tower. This transaction supports our vision to be the number one choice for New Zealanders and our strategy to connect New Zealanders to valuable products, services and experiences that enhance and protect their financial wellbeing,' he said.

'We strongly believe in the compelling benefits of the acquisition and the significant value that would be created for Suncorp shareholders and benefits to market competition.

'We are also committed to protecting Tower's unique strengths through complementary multi-brand distribution and offering Tower's customers access to a broader range of products and services.'