Hanover makes surprise court bid to prevent Tower vote

By PAULA OLIVER

The drama around Tower's recapitalisation intensified last night as Hanover Group sought a High Court injunction to stop a shareholder vote scheduled for today.

In a surprise late night hearing in Auckland, Hanover argued that shareholders were not fairly and fully informed to vote on the removal of Tower's 10 per cent shareholding cap.

The vote was the only item on the Tower special meeting's agenda.

It is understood that Hanover took the action after learning that Guinness Peat Group's Tony Gibbs was still fighting to underwrite Tower's $210 million rights issue.

GPG owns 9.9 per cent of Tower and wants more.

Hanover owns 4.3 per cent but its ambitions are unclear.

Removing the shareholding cap could allow GPG to join the underwriting and thereby boost its stake to as much as 20 per cent.

Hanover's lawyer argued before Justice John Laurenson that there was no explanation of why Tower needed to proceed with the vote.

As other items on the original agenda had gone, it was not clear to shareholders why they should be asked to vote on the cap.

Shareholders who had cast proxy votes had also been disadvantaged.

Hanover, with AMP and others, has been a key figure in a shareholder revolt against GPG's original plan to recapitalise Tower.

That deal would have given GPG a 30 per cent stake in Tower and effective control - a prospect which led the rebel shareholders to cobble together an alternative pro rata rights issue.

Tower's board accepted the rebel plan on Tuesday night.

Since then GPG has been fighting to join the underwriting for the new scheme.

Sources last night indicated that Hanover wanted to stop today's shareholder meeting because it was alarmed that GPG would not give up.

There was concern that GPG could raise its stake in Tower substantially if the cap was lifted.

The drama continues what has been a roller-coaster ride for Tower over the past month.

If it goes ahead, the meeting could be a feisty clash between warring shareholder factions.