Tower chairman Falconer steps down as insurer considers offers following review
By Jonathan Underhill
Sept. 13 (BusinessDesk) – Tower chairman Bill Falconer has stepped down as the insurer considers proposals from other parties following a strategic review aimed at lifting the value of the company.
Falconer, who was due to retire in February, will be replaced by director Steve Smith as interim chairman in a move that would “enable a new chairman to implement the initiatives emanating from the strategic review,” the Wellington-based company said in a statement today.
Tower “is considering a number of proposals with interested parties after completing a strategic review” undertaken by senior managers with the support of Goldman Sachs, it said.
The company’s strength “was not reflected in the market price for Tower shares at a time when the company had achieved strong financial results and had strengthened operational efficiency,” said managing director Rob Flannagan.
“While Tower had outperformed the New Zealand market since its separation from Tower Australia, it was the board’s view that more shareholder value could be created,” he said. “To this end the board is open to changing Tower’s business structure to improve the value achieved for shareholders and is considering proposals including operational alliances and divestment of assets. “
Announcements about the propositions being investigated would be made if they represented realistic options for the company, he said. Talks with interested parties were expected to be completed in time for the annual meeting in February next year.
The shares last traded at $1.85 and have gained about 20 percent this year. Tower is rated a ‘hold’ based on a Reuters survey of five analysts.