Tower to go ahead with Australian spin-off

10.00am

Tower confirmed today it would go ahead with plans to list its Australian funds management business on the Australian stock exchange.

Chairman Olaf O'Duill said the board made the final decision to go ahead following a review of the proposal by Caliburn Partnership.

Mr O'Duill said in a statement the spin-off would provide a more focused strategy for each separately listed entity.

Under the proposal Tower will transfer its Australian funds management businesses, Bridges and Tower Trust, into a new company called Australian Wealth Management Ltd (AWM). Tower will receive 120 million shares in AWM, worth A$1 each ($1.12), as well as cash payment of A$130 million.

The 120 million AWM shares will then be transferred to existing Tower shareholders to cancel out Tower shares they already own.

The deal is conditional on shareholder and court approval.

AWM will undertake a capital raising of about A$130 million, by way of an entitlements offer of additional shares in AWM to make the cash payment to Tower. The entitlements offer will be fully underwritten by GPG on terms to be approved by shareholders.

After the share cancellation and completion of the capital raising, Tower will have no equity interest in AWM.

A shareholders' meeting to approve the scheme will be held in late January 2005, with listing on the ASX expected to follow in February.

- NZPA