TOWER's bid anything but friendly
Tuesday, October 5th 2010, 6:59AM 
6 Comments
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On 5 October 2010 at 8:53 am Adolf Fiinkensein said:
"...it only needs all the beneficiaries to agree ...
and
"... There is not complete harmony among the beneficiaries...."
Think about that Richard R, for more than a minute, why don't you?
On 5 October 2010 at 9:46 am Richard R said:
Adolf, the meaning is that not all the beneficiaries are in line with Gordon's philosophy. On 6 October 2010 at 12:31 pm Keith Walter said:
Richard.
You obviously didn't think about it as Adolf suggested but rushed back into print.
Unfortunately, with the format used for making comments on this website you cannot change the textformat to emphasise a point.
Let's see if I can make it clearer for you by puting the words to be emphasised in inverted commas.
...it only needs "all" the beneficiaries to agree.....
...There is not "complete" harmony among the beneficiaries....
On 6 October 2010 at 7:55 pm economic rationalist said:
Tower's initial bid will fail as it too cheap, but expect them to come back. Fidelity's current ownership structure (majority owned by a trust)is not viable in the long term. As both the trustees and the beneficies age, at some point they will want to cash up. Also, Life companies face increased solvency requirements to meet the Reserve Bank's draft standards. It would be difficult for Fidelity to raise new capital if required.
Tower has about 5% to 10% market share in its various businesses (Life, Health, General insurance & funds management) so it needs to get bigger by acquisitions, as its former Australian offshoot did.
On 14 October 2010 at 6:16 pm oscar d nail said:
Does anybody think on the inducement of a premium on each share above its current value? How big should the premium be to induce the current shareholders or the beneficiaries or even the small holders?
In this tough economic time, premium may be something to be captured now rather than waiting for 3-5 years, although just 2.5%. Econ rationalist said “it would be difficult Fidelity to raise new capital if required”. No brainer for the beneficiaries and the 11 main holders and also for the small shareholders to accept the cheap offer.
If it’s not successful then 2.5% is not enough or the current shareholders may say “5%”. At least there is a complete information of how big P should be. Of course the higher the premium the higher the success rate of the takeover.
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There is not complete harmony among the beneficiaries.