KEY POINTS:
Tower shareholders are back in the money - just - as shares in the company's recently demerged Australian business continue to bound ahead.
Since splitting its New Zealand and Australian arms into separate companies last month, Tower NZ's market performance has been, in the words of its new chairman, Tony Gibbs of cornerstone shareholder Guinness Peat Group, "lacklustre" while Tower Australia has "taken off like a rocket".
In the first few days after the split, Tower NZ's market slide saw the combined market capitalisation of the two companies, including entitlements to buy further Tower Australia shares, fall by more than 10 per cent.
However, by the end of trade yesterday - with Tower Australia shares closing at A$2.65 and Tower NZ closing at $2.04 - a Tower investor's holding was worth a touch more than immediately before the split, assuming he had held on to his shares and rights.
Initial trade in Tower shares after the split was marked by confusion which Tower itself blamed on incorrect price information from Australian sharemarket operator ASX.
Analysts believed the confusion was due to an inaccurate independent valuation included in Tower's information provided to investors ahead of the split.
ABN Amro analyst Graeme Petroni said the market's preference for Tower Australia was reinforced by the two companies' full-year results.
"Relative to management's guidance in the recent scheme book, the Australian company did outperform expectations and the New Zealand company slightly underperformed.
"It does look like there's a lot of operational momentum behind the Australian company, and to my mind it looks as though there's a takeover premium on both but perhaps more on Tower Australia."
Meanwhile, trading in the rights to buy further Tower Australia shares for A$1.60 each in a A$160 million issue of new shares has also been untidy, with some New Zealand shareholders complaining they had not received notification of their entitlements.
Today is the last day the rights can be traded, and at Tower Australia's closing price yesterday they are worth A$1.05 each.
Rights not sold or taken up by shareholders will fall to the underwriter of the capital raising, GPG.
In an announcement to the sharemarket yesterday, Tower gave details of a sharemarket information hotline investors could use to confirm their entitlements and said they did not need to have received their entitlement and acceptance forms before selling. However, they will need the documents to subscribe for the new shares, which they must do by Thursday next week.
Gibbs said Guinness Peat Group stood to increase its stake in Tower Australia "very little" as a result of entitlements not exercised in the capital raising.
"The whole thing is about making sure Tower Australia has access to capital."
10,000 Tower shares
Before the split
* 10,000 shares at $3.28.
* Total value: $32,800.
After the split
* 5240 Tower NZ shares at $2.04: Worth $10,690.
* 6511 Tower Australia shares at A$2.65: Worth A$17,254.
* 2780 entitlements to buy Tower Australia shares for A$1.60 at A$1.05: Worth A$2919.
* Total value: $33,849.
