TWR - Tower Insurance.

[winner69]

No doubt they will reduce the divs probably to zero. I still think Tower has a protectable customer base and remains a takeover target so will recover. It remains to be seen how long that will take. Pure value investor opinion here.

I have the feeling many/several have looked over Tower as an acquisition and say nah ....at least while an unquantified significant liability hanging over their heads

Maybe in a few years time if they get through the current crises

[Schrodinger]

Thats true but didnt IAG buy the good parts of AMI which was a terrible insurer? Tower is a better run company.

[winner69]

Thats true but didnt IAG buy the good parts of AMI which was a terrible insurer? Tower is a better run company.

But only after the bad parts had been taken by the government

Can Tower isolate / ring fence their bad parts?

[Schrodinger]

Possibly. Their losses are far smaller than AMI and I think the good parts will outweigh the bad so no need for Government intervention (AMI was insolvement).

[winner69]

Possibly. Their losses are far smaller than AMI and I think the good parts will outweigh the bad so no need for Government intervention (AMI was insolvement).

Agree but the immediate / short term issue is that the bad parts seem to be unquantifiable

Would you buy all of Tower in these circumstances? If you did you want a big discount to cover youself

[Arbroath]

Agree but the immediate / short term issue is that the bad parts seem to be unquantifiable

Would you buy all of Tower in these circumstances? If you did you want a big discount to cover youself

Agree winner - imho an opportunistic bid will only come at c. $1.50 once there is some clarity around Chch liabilities - could be another 12-24 months and in the meantime likely no divis so its a hold if you think they can work through it and then worth c. $2 in 2018 again.....maybe

[Schrodinger]

One problem is that the CC will not allow a purchase from IAG.

http://www.interest.co.nz/business/6...icle-insurance

55% is probably above their comfort level.

[Humphrey Appleby]

Any thoughts on this re a takeover?

I daresay it would be a flat no for IAG, CC would have some issues with a majority market share however Suncorp or QBE could certainly be likely. In my experience, QBE aren't too keen on domestic insurance on NZ risks, and only offer it to a select large brokers (Crombies, Aon, Marsh) or cluster brokers (BWRS, Rothbury Group, etc) however a purchase of a ready-made Direct Insurer might appeal to them, especially if they're looking to expand; IAG have State and AMI, Suncorp have AA.

On the other hand, an Asian buyer further afield is possible. Dai-ichi Life took over TOWER Australia and rebranded the outfit, what's to say they wouldn't do the same over here to complete the set?

http://www.insurancebusinessonline.c...an-223757.aspx

[tim23]

Read an article today saying takeover talk? One of the banks could gobble up market cap is way under 200 million

[bull....]

would be massively surprised if anyone brought them at the moment with such big problematic overhangs ie Christchurch other aussie companies have the same problem so why would they want more liabilities sounds like talk to hold the share price up for someone to sell into lol