Tower truce urged on warring pair

By PAULA OLIVER

Efforts are being made to broker a peace deal between warring Tower shareholders Guinness Peat Group and Hanover Group.

The two parties have been at loggerheads during the long battle for a share of Tower's $210 million rights issue - firing public accusations of greenmail and unfair play towards one another.

Hanover yesterday confirmed that its latest move had been to write to the Takeovers Panel to object to GPG underwriting the rights issue.

GPG's underwriting agreement with Tower stunned many on Friday night because it meant that a First NZ Capital proposal, backed by Hanover Group, was scrapped.

It is understood that Hanover's complaint centres on an alleged possibility that GPG could end up with more than 20 per cent of the voting rights in Tower after the underwriting.

Under the GPG deal, it is restricted to retaining no more than 13.75 per cent of Tower as part of the underwriting.

If there is a shortfall in the rights issue GPG can pick those shares up but it must sell them within six months.

During that time it has no voting rights on the shares.

Hanover's letter to the Takeovers Panel followed a failed complaint to the NZX's Market Surveillance Panel, and an unsuccessful court attempt to stop a shareholder vote at Tower's special meeting last Friday.

GPG, which also made its share of complaints during the recapitalisation process, has responded to Hanover's moves by refusing to invite it to be a sub-underwriter.

Executive staff at the Takeovers Panel are expected to decide within days whether to refer the complaint further. But shareholder advocate Bruce Sheppard yesterday called for a truce.

"Hanover are probably better to pull their horns in and just run with the flow," Sheppard said.

"I'm trying to convince them to stop."

Sheppard, who at times during the recapitalisation saga vehemently opposed GPG's Tony Gibbs, said he had made an effort yesterday to patch up that relationship.

Now he hoped Hanover and GPG could do the same.

"Win, lose or draw, the deal's done and we need to lick our wounds and get on with it."

Gibbs was unrepentant on his refusal to offer Hanover a slice of the sub-underwriting action.

"You've got to be joking," he said.

It is understood that Hanover will not proceed with a threat to call a special meeting to get rid of Tower's board.