Tower’s long-suffering policyholders moved another step closer today to finding out if - and when - the big mutual will metamorphose into a listed company.
Tower’s long-suffering policyholders moved another step closer today to finding out if - and when - the big mutual will metamorphose into a listed company.
Tower’s plans have been continually hampered by Sir Ron Brierley’s Guinness Peat Group (GPG), which was responsible for today’s hearing at the Court of Appeal. Although Tower’s demutualisation scheme won provisional approval at the High Court last December, GPG still claims that the scheme is illegal and unfair.
At the Court of Appeal in Wellington today, Rt Hon Justices Henry, Thomas and Blanchard appeared to have little time for the arguments put forward by GPG’s lawyer Bill Wilson QC. Justice Blanchard said some of them would be ‘absurd’ if taken to their logical conclusion and also that some of Wilson’s interpretations of the Tower Act would have Parliament putting Tower ‘in somewhat of a straightjacket’.
Wilson argued against the High Court ruling for approving a scheme which would give 30 per cent of Tower’s shares to policyholders in its subsidiary companies, by doing so through partly-paid shares and for holding that shares could be issued out of the ‘economic value’ or projected market value of Tower Limited on listing.
However, Tower’s written submission to the court said that GPG failed to mention or recognise in any respect the need for the demutualisation scheme to compensate all members for the loss of their membership rights "yet international precedents clearly establish that compensation is appropriate".
"GPG’s involvement in these proceedings is a simple attempt to obtain value for itself and its shareholders which would otherwise be going to Tower’s members."
GPG has been seeking to merge its subsidiary Tyndall Australia with Tower for well over a year but has repeatedly been repulsed as a suitor. However, it could now be a case of the biter bit, following speculation that Tower is itself eyeing up Tyndall.
The Court of Appeal reserved its decision on the hearing. GPG has not ruled out going to the Privy Council if it is unsuccessful.
Meanwhile, Tower hopes to be able to meet soon with its members to gain the 75 per cent support required for demutualisation to go ahead. All going smoothly, it should convert from a mutual in the next few months and list on New Zealand and Australian exchanges around mid year.
Tower’s long-suffering policyholders moved another step closer today to finding out if - and when - the big mutual will metamorphose into a listed company.