Tower out of the loop on GPG's sale plans

Tower discovered a cornerstone stake was officially up for sale at the same time as the rest of the market.

Monday, February 14th 2011, 5:54AM 1 Comment

by Jenny Ruth

The company says it is "reassured" by 35% shareholder Guinness Peat Group's announcement it plans an orderly realisation of all its assets with the possible exception of Coats.

"It is reassuring that (Friday's) announcement confirms that GPG's value realisation will be undertaken in an orderly manner and over a time frame appropriate to each investment," Tower chairman and former GPG executive director Tony Gibbs says in a statement.

Tower's board has offered GPG its assistance and says it has "every confidence" Tower's management and strategic direction "will be unaffected by whatever steps GPG may take and that the process can be undertaken in a manner which safeguards shareholder value," the statement says.

Gibbs is overseas and unavailable but Tower managing director Rob Flannagan says neither he nor Gibbs, who has been based in Tower's Auckland office since he was sacked from GPG last June, have had any contact with GPG.

"In many ways it's almost got nothing to do with us," Flannagan says. "They haven't spoken directly to us at all."

GPG also owns 66% of fruit and veg distributor and apple exporter Turners & Growers of which Gibbs is also chairman.

Gibbs was sacked from GPG after he publicly disagreed with a previous plan to split GPG in two, siding with a groundswell of protest from local investors who eventually forced GPG to appoint four independent directors who outnumber the remaining three directors.

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Comments from our readers

On 14 February 2011 at 8:26 am Independent Observer said:

Tower’s fate is another reminder of the consolidation that is occurring within the NZ financial services arena, and follows equally high profile “foreign” decisions to vacate the shores of NZ.

In many ways, these decisions are not a direct indictment on the opportunity that exists in the NZ financial services market (albeit that it is massively over-supplied at the present time), it is more to do with a global alignment of interests. Unfortunately little old NZ doesn’t even register on the global radar when it comes time for foreign entities to figure out how to get the biggest bang from their buck.
What does it mean for NZ IFA’s & their clients: you need to be very aware of those product suppliers who you chose to support – not just from a capabilities perspective, but also from the sustainability perspective