Guinness Peat Group is bidding for a 15.3 per cent stake in Tower. If successful the the bid would take GPG's holding to 35 per cent.
GPG will offer $2.30 for the shares, putting a value of $917 million on the insurance and funds management company. Tower shareslast traded at $2.08 putting the offer premium at just over 10 per cent.
"We want to get some more skin in the game," GPG executive director Tony Gibbs said yesterday.
Because of the partial nature of the offer its success will also be dependent on the approval of at least 50 per cent of Tower shareholders.
Gibbs dismissed the suggestion that a 35 per cent stake would give GPG control of Tower without the need for it to take an outright majority.
"They say that at 20 [per cent], they can say that at 35, 40 per cent ... ," he said. "The fact is it has got a very independent board, we don't plan on putting on any more directors."
Gibbs said GPG's investment in Tower, New Zealand's third-largest retail fund manager, had reduced in the past few years as a result of the spin off of Tower Australia Group and Australian Wealth Management.
The Tower group was split into separate Australian and New Zealand businesses in 2006.
The Australian Wealth Management business was spun off in 2005.
The offer gave GPG the ability to invest more money in the company, he said.
There were a number of small investors that had been left holding "uneconomic" parcels of Tower shares after the split, he said.
This would present them with a good opportunity for them to cash up.
Tower yesterday advised shareholders to hold off taking any action on the offer pending its evaluation by the board and an independent valuers report.
GPG shares gained 1c to $1.75 by the close trading.
