Tuesday 17th June 2003
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The two firms are an interesting fit as Tower has plenty of expertise in managed funds (particularly shares, hedge funds and property) while Hanover, which owns FAI, United Finance, Elders and Nationwide, is big in the cash product range.
Hanover's half-owner and executive chairman Mark Hotchin says the company has been eyeing the managed fund market for some time but hadn't yet found a suitable acquisition.
"We've been trying for the last 24 months to move into that area to a significant degree but at this point it's eluded us."
He says 18-24 months ago Tower was too large a target, however it has become more appealing as its shareprice fell.
When asked if Hanover would like to acquire Tower Hotchin answered: "In a perfect world yep. At the right money on the right terms at the right time yes."
"I don't say we went into it with the idea of taking the company over but certainly the idea was if it continued to be attractive we'd continue to buy what we could of it."
Tower's size was always an issue, but so too now is GPG which owns about 10% of the company and is likely to own at least one third of it after Tower's recapitaliation.
Hotchin says Hanover has concerns over the arrangements for the capital raising as GPG is effectively getting control at a discount as opposed to the more traditional approach of paying a premium.
Hanover was forced to reveal its hand yesterday after people got wind of the company's buying spree and it was now a matter of seeing how things unfolded.
He says Hanover is not on a speculative make quick money scheme, rather the share-buying is something with a longer term, more strategic focus.
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