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Tower shareholders approve AWM spinoff

Tuesday 25th January 2005

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Just seven hands were raised in opposition to the Tower Group's split of its Australian Wealth Management business.

The newly formed company will list on the Australian Stock Exchange on February 15.

AWM is primarily made up of two parts of the Tower Group - Bridge's, which offers master trust, financial planning and stock broking services; and Tower Trust provides trustee and funds management services to financial advisers and other businesses.

A special meeting in Wellington this morning approved the split with only seven dissenting votes. A second vote, to allow cornerstone shareholder Guinness Peat Group to underwrite the $NZ130 million rights issue of shares in AWM, was passed with only three dissenting votes.

Tower's existing shareholders are being allocated a set number of shares in AWM in proportion to their shares in Tower, along with an entitlement to buy more shares.

Although some shareholders queried the use of GPG to underwrite the offer, arguing that it gives the company, which already holds 19.1% of Tower Group, too much influence, chairman Olaf O'Duill told the meeting that finding an alternative could depress the value of Tower shares.

"It's only if Tower shareholders do not take up their offer in the now company that GPG will be able to take up its offer,'
O'Duill says.

"Any underwriter would have taken up that parcel of shares...we felt GPG would be the best party to underwrite this deal because this way there won't be an overhang of shares in the market place, thereby possibly decreasing the value of the shares."

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