GPG lifts Tower stake past 10pc

By PAULA OLIVER

Key Tower shareholder Guinness Peat Group has increased its stake in the insurer - providing further evidence that the corporate raider wants a big slice of the company.

GPG revealed in a notice to the stock exchange yesterday that it had raised its stake in Tower to 11.65 per cent from 9.93.

The shares were bought on Monday, and the move marked the first time a shareholder has held more than 10 per cent of Tower's register.

Shareholders voted to remove the company's 10 per cent limit this month.

GPG's move comes a week after arch-rival Hanover Group revealed that it had lifted its Tower stake to 6.3 per cent.

Hanover chief executive Kerry Finnigan warned GPG and Tower's board that Hanover intended to stick around and seek a seat on the board.

Market observers are speculating that GPG will take its Tower stake to just under the Takeovers Code limit of 20 per cent, and establish itself as a cornerstone shareholder.

GPG, which is underwriting Tower's rights issue, cannot go past a holding of 13.75 per cent under the terms of the underwriting agreement.

But it can go past that limit if it buys on-market.

Shares in Tower have been heavily traded since the rights issue began.

They closed down 2c yesterday at $1.18, and rights closed at 27c.