TWR - Tower Insurance.

[Jaa]

Rumour from Today's Herald that Tower are sniffing around Huljich.

Tower, which you will recall recently launched a futile bid for Fidelity, is allegedly 'in talks' with Huljich. Fidelity itself has also been mentioned as a possible buyer for Huljich.

http://www.nzherald.co.nz/business/n...ectid=10705527

[_Michael]

With solid operations in Life, Health and General insurance...

the natural competitive advantage of being a default KiwiSaver provider...

and an asset rich over capitalized balance sheet...

TWR is a sitting duck in my opinion.

A very attractive asset to any of the major banks or Wealth Managers or Insurers.

You can be sure GPG will ensure a premium price negotiated also.

[macduffy]

[QUOTE][You can be sure GPG will ensure a premium price negotiated also. /QUOTE]

I'd like to think so but with GPG I'm not taking anything for granted!

TWR has been effectively "in play" for some time in the sense that the market knew that GPG would want to quit it at some stage, as it did with the Aussie parts of the original business. But at least the latest move serves notice to interested parties to get their acts together with a little more urgency.

[Jaa]

To me NAB is the obvious buyer, no competition issues and achieves in NZ what they were trying to do with AXA Asia Pacific.

If we use the 16x P/E ratio that was used by AMP for AXA AP and by NAB for Areva we get a share price of 0.223 * 16 = $3.57

[modandm]

I think there are a few wishful thinkers on TWR.

The fact that they have not already been snapped up is an indication of concerns potential acquirers have for the business.

My concerns relative to business unit would be:

General - TWR does okay - but in a very competitive sector is loosing against IAG

Health -Struggling against a dominant not for profit which is far more capable in southern cross.

Life - Tough business in the best of times - TWR is making some progress but there is lots of competition and big banks arms e.g Soveriegn have a clear advantage

Investments - Here TWR is doing quite well. Imho this is the best of the TWR businesses and would be great spun out.

Just to end I would like to say I am no expert on tower at all - just my observations on the market and my xp consulting to SX and TWR

[modandm]

To me NAB is the obvious buyer, no competition issues and achieves in NZ what they were trying to do with AXA Asia Pacific.

If we use the 16x P/E ratio that was used by AMP for AXA AP and by NAB for Areva we get a share price of 0.223 * 16 = $3.57

AXA AP and Tower are totally different. One is a FP network with FM and Insurance. One is a Insurer and FM without a FP network.

[Jaa]

AXA AP and Tower are totally different. One is a FP network with FM and Insurance. One is a Insurer and FM without a FP network.

AXA and Tower (& AMP) have been in competition for well over 100 years.

They both sell Life Insurance, managed funds and are defualt KiwiSaver providers which togetjer is well over half of each company's business. TWR have a sizable General Insurance business that AXA doesn't but I don't see how that is a disadvantage from say NAB's perspective?

TWR has a non-aligned financial planner network that isn't as big or as effective as AXA's aligned adviser network but isn't small either. As NAB/BNZ already have hundreds of branches and BNZ Partners centres around the place I don't see this as a deal breaker.

[winner69]

See Shoeshine (NBR) suggests that Tower use their surplus capital to buy back some of the GPG stake itself ....... GPG interest becomes less than 20% - then it would be easier for GPG to quit their reduced holding

Interesting thought

[lissica]

Not a bad idea w69 - at the right price of course - discl: hold both.

I'm guessing that TWR's R/I arrangements will limit their exposure to just 5 mill again. Any dissenters?

That's what they said in yesterdays announcement.

[CJ]

I'm guessing that TWR's R/I arrangements will limit their exposure to just 5 mill again. Any dissenters?

Any chance they can claim it was an aftershock (technically true) from the original quake and therefore no further exposure. I guess not or else they would have said.