Tower members vote to list

By Richard Braddell

WELLINGTON - Tower Corporation expects to list in late September or the first week of October after members voted almost unanimously in favour of the group's demutualisation scheme.

Tower's managing director, James Boonzaier, said after the vote in Wellington yesterday that the addition of a decent-sized financial services group would be good for the New Zealand sharemarket, too often viewed by foreign investors as constituting Telecom and a couple of forestry companies.

Also listing in Australia, Tower is expected to enter the top 10 with a market capitalisation in excess of $1 billion.

The scheme, which was approved yesterday by 99.5 per cent of parent company members and 98.7 per cent by members in the subsidiary companies, comfortably exceeding the 75 per cent vote required in both categories and also bettered similar demutualisation votes, such as AMP's.

Nevertheless, the demutualisation still has a final hurdle to clear in the form of a Privy Council action brought by Guinness Peat Group, which has strenuously opposed Tower's plans in furtherance of its own scheme which would demutualise Tower by merging it with Tyndall Australia.

GPG's appeal to the Privy Council on the fairness of Tower's scheme was originally scheduled for July 23, but had been brought forward to June 10 against opposition from GPG quarters, Mr Boonzaier, said.

However, he was hopeful that what he termed a futile attempt to hijack the process would not go ahead, particularly as there was little commercial logic since the sale of Tyndall to Royal & SunAlliance went unconditional last Friday after clearing 90 per cent acceptance.

"It has taken two years of quite hard work to get to this point and I think if nothing else, this [vote] certainly addresses the fairness of the scheme," Mr Boonzaier said.

Tower was confident of winning the Privy Council action and wanted the hearing out of the way quickly since it had already lost six months due to GPG's activities, he said.

Earlier, Tower's chairman, Colin Beyer, said the GPG proposal "was never a runner

since from the first time it was mentioned, it was "many hundreds of millions of dollars short of the mark".

A shareholding limit of 10 per cent is to be imposed during the first four years as a listed company although that can be lifted on a 75 per cent vote of shareholders. Tower is adopting the most stringent of the stock exchange's takeover regimes, minority veto, which ensures that all shareholders are taken out at the same price.