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Sanderson orders Guinness for Baker

Sanderson orders Guinness for Baker

GUINNESS PEAT Group is receiving ongoing advice from firm Baker & McKenzie on its role in the proposed geographic separation of the Australian and New Zealand businesses of trans-Tasman insurer…

GUINNESS PEAT Group is receiving ongoing advice from firm Baker & McKenzie on its role in the proposed geographic separation of the Australian and New Zealand businesses of trans-Tasman insurer Tower Ltd by way of demerger.

Once shareholder approval is obtained in November, the Australian business will undertake capital raising of between $150 million to $180 million through a renounceable rights issue, with a view to being listed on the ASX.

Tower’s largest shareholder, international investment company Guinness Peat Group, lends its full support for the separation proposal and will underwrite the proposed issue subject to its shareholders’ approval.

The man slated to head the Australian business, Tower Group managing director Jim Minto, said “this proposal will allow the Boards and management to focus on their respective operations and I believe will over time lead to better performance of each entity”.

Baker & McKenzie’s corporate and securities partner, Guy Sanderson, is the Australian advisor to Guinness Peat Group for the demerger.

“It is a proposal which will create value for shareholders in Tower, because it will be a way of releasing and recognising separate value in each of the NZ and Australian businesses,” Sanderson said.

Sanderson fully expects Tower’s shareholders will approve the demerger later in the year.

“It was a very successful model which they used with Australian Wealth Management, and so you would expect it to be similarly supported by shareholders this time around,” he said.

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