by Jenny Ruth
Tower has been without a permanent chief executive since James Boonzaier left the position five months ago. Chief financial officer Keith Taylor has been acting chief executive since then.
"I struggle to come up with a name," says one analyst. "It’s a difficult challenge for anyone who goes into the chair."
Another analyst says Tower "will struggle to attract a person of calibre."
There’s still the possibility that Tower will appoint an internal candidate.
Chairman Colin Beyer confirms that Taylor and Jim Minto, formerly head of the New Zealand operations who was appointed last month to sort out the company’s problems in Australia, are in the running. "It might be one of the two. I don’t want to say anything more about it."
Tower shares are trading at $1.67 compared to well above $4 before Boonzaier left.
While all analysts value the company at well above the current share price, they are as much at a loss to come up with potential takeover candidates.
The restriction limiting any single shareholder to 10% for the four years following the 1999 float unless 75% of shareholders vote to change that rule has previously been seen as providing takeover protection.
But following Colonial’s takeover by Commonwealth Bank, in which shareholders voted to remove a similar cap, analysts believe the restriction could be easily overcome.
"It’s not really a protective measure. It just gives you an element of safety against hostile bids," says one analyst.
He suggests one possible candidate to take over Tower could be Royal & Sun Alliance after its Australasian operations are floated – until recently, Tower was interested in buying some of RSA.
Meanwhile, Minto yesterday detailed changes in Australia outlined earlier this month when Tower announced its $74.9 million annual loss.
About 70 staff are being made redundant on top of the 50 sacked since September as part of the company’s efforts to cut operating costs in Australia from $A102 million in the year ended September to $A85 million in the current year.
Tower Australia is also selling its internet annuity business, Adviserblue, closing its tied advice business Tower Financial consultants and merging Tower Managed Funds back into the main company.
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