Economy

Suncorp ends NZ takeover bid

Suncorp ends NZ takeover bid”

Suncorp' Vero had made a $236.1 million bid for Tower, which was blocked by the regulator over competition concerns.

But it's plan was scuppered in July, when the Commerce Commission vetoed the takeover because it threatened to substantially lessen competition, potentially leading to higher house, vehicle and contents insurance premiums for households.

In an announcement to the Australian ASX sharemarket Suncorp said its decision was a result of Tower ending the two companies' "agreement" to pursue the takeover.

Tower has yet to confirm the status of its own commission appeal.

The Australian financial services business said its subsidiary Vero had received notice of termination from Tower and Suncorp would now focus on maximising the value of its 19.9 per cent Tower shareholding.

Auckland-based Tower terminated a scheme implementation agreement with Vero after the deal passed its end date, but has told the Australian insurer it's willing to discuss new terms once it has raised capital. In a statement, Tower chairman Michael Stiassny said the board is working on plans to raise capital and will update the market when it releases full-year results on November 14.

Both Vero and Tower appealed the commission's decision and a hearing was scheduled for late January.

Tower's share price has fallen on the news.

Vero is giving up in its battle with the Commerce Commission to get the green light to take over Tower.

Vero owns 20% of Tower, having paid up to $1.40 a share accumulating its stake.



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