KiwiSaver obstacle to Tower sell-off

TIM HUNTER
Last updated 05:00 01/02/2013

Relevant offers

Industries

40,000 eftpos terminals to be upgraded or replaced Port Nelson facing increased post-quake workload Auckland Airport expecting a busy summer Inland Revenue legal boss 'not qualified' to make call on trust in tax system Housing costs lead rise in household spending How New Zealand's national Crate Day came to be Ngai Tahu spends $200,000 hunting leak to the media Renewed calls for coastal shipping, interislander rail service still doubtful Liquorland Timaru selling crates of Vodka Cruisers for National Crate Day Spark warned off marketing new fibre plans as gigabit plans, regulator confirms

Listed insurer Tower's role as a default KiwiSaver provider could yet be a complication if the company sells its investment arm.

It is understood three potential buyers are in the frame, but none can acquire Tower's default provider status without approval from the government.

Market sources say the three include a New Zealand consortium involving Fisher Funds and TSB Bank. The other two are said to be a boutique Australian fund manager and a large Australian financial institution.

BusinessDay understands that Tower will entertain bids only for the whole funds management business and will not sell the KiwiSaver operation separately.

Tower has about $4.2 billion of funds under management, of which about $900 million is in the KiwiSaver scheme. According to Morningstar about $460m of that KiwiSaver money is invested in Tower's default fund, one of six funds allocated to savers who don't choose their own fund.

Tower has been going through a strategic review of its businesses and in November announced the sale of its health insurance arm for $103m to Australian insurer Nib Holdings.

Tower shares closed down 3c yesterday at $1.93, valuing the company at $519m.

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content