Tower Limited (NZSE/ASX: TWR) and Fairfax Financial Holdings Limited (TSX: FFH) have entered into a Scheme Implementation Agreement pursuant to which Fairfax will acquire 100% of Tower shares at NZD $1.17 per share for $197 million or US $144 million.
The transaction has been unanimously approved by the Tower board of directors. Salt Funds Management and ACC, two of Tower’s largest shareholders who collectively hold 18.1% of Tower shares, have entered into supporting agreements in favour of the transaction.
The Scheme Implementation is expected to close on or before June 30, 2017.
Goldman Sachs and Chapman Tripp act as financial and legal advisor to Tower. Simpson Grierson acts as legal counsel to Fairfax.
“Tower is one of the largest insurers in New Zealand and the Pacific Islands, with a long-standing history, good brand recognition and a strong market position,” said Prem Watsa, Chairman and CEO of Fairfax. “The acquisition of Tower will provide us with an immediate significant presence, with a strong management team, which will continue to be led by Richard Harding, in a market where Fairfax currently has limited exposure.”