KEY POINTS:
Tower is blaming an Australian Stock Exchange error for confusion when shares in its New Zealand unit began trading last week.
Dual-listed Tower New Zealand shares, which closed at A$2.88 on the ASX on November 10, began trading last Monday as if the cancellation of 47.6 per cent of the stock and the issue of new shares in Tower Australia had taken place.
Trade in the shares over the following week was marked by extreme volatility and general confusion. They initially traded as high as $3.25 before plunging to $2.05, then rising to a ceiling of $2.58.
Yesterday, Tower said ASX Market Information data distributed to subscribers from last Monday applied a dilution factor of 0.7311 to Tower's November 13 closing price, resetting it to A$2.11 and altering Tower's historic share price data.
"Given the nature of the separation, Tower has always been of the opinion that no dilution factor should have been applied," Tower said.
"Tower communicated this view to the ASX. The ASX has now agreed with Tower's position and has effectively removed the dilution factor in the form of an updated communication to its subscribers."
Tower said market participants that used information from the ASX could now view Tower's share prices "in the correct historical context".
The error did not affect information from the NZX.
"'Our concern was that investors may have been misguided by the erroneous Tower closing price," said Tower Australia chief Jim Minto.
"They took the adjustment as gospel. It set the opening and confused people."
ASX spokesman Matthew Gibbs this week said the exchange was unaware of any issues regarding Tower NZ share price information.
Yesterday, he said: "ASX worked closely with the company to ensure a satisfactory outcome for market participants."
Minto said that despite the erroneous data, "the market was always going to find its level".
While Tower's management undertook the demerger of its Australian and New Zealand units to "unlock value" for shareholders, the combined market value of the companies has yet to equal Tower's pre-split market cap.
Tower Australia shares have been favoured by investors over those in Tower NZ but yesterday dropped 5c to A$2.25.
Tower NZ shares closed 2c higher at $2.12.
Minto has said he expects to see further fluctuations "while everyone gets themselves sorted out into the new year when all the rights trading has gone".
