TWR
02/11/2012 09:58
ASSET
REL: 0958 HRS Tower Limited
ASSET: TWR: TOWER sells health insurance business
2 November 2012
For immediate release
Market Information
NZX Limited
Level 2, NZX Centre
11 Cable Street
Wellington
New Zealand
Company Announcements Office
Australian Stock Exchange Limited
Exchange Centre
Level 6, 20 Bridge Street
Sydney NSW 2000
AUSTRALIA
TOWER sells health insurance business
(Auckland - NZ) TOWER Limited today announced it has sold its health
insurance business, TOWER Medical Insurance Limited, to nib holdings limited
(nib) for approximately NZD$102 million.
nib is one of Australia's fastest-growing health funds, providing affordable
health cover to more than 900,000 customers throughout Australia. It is the
only ASX-listed Australian private health insurer (ASX: nhf).
TOWER Group Managing Director Rob Flannagan said the sale of TOWER Medical
Insurance Limited followed a strategic review of the Group's business,
announced earlier in the year.
"We have carefully assessed our involvement in and outlook for each of the
insurance markets in which TOWER operates. We do not consider that we will be
able to achieve the necessary scale or return in this business in the
immediate future, and therefore have made the strategic decision to sell
TOWER Medical Insurance Limited."
nib's Managing Director, Mark Fitzgibbon, said the acquisition is in line
with nib's strategy of expanding its operations into international markets.
"nib has been investigating opportunities in New Zealand for some time. TOWER
Medical meets nib's strict investment criteria in terms of strategic
rationale and return on investment," Mr Fitzgibbon said.
"With a market share of approximately 13%, TOWER Medical provides an
opportunity to emulate the success nib has achieved in Australia since its
listing in 2007 through brand building, product design, distribution and
outstanding customer service," he said.
"In addition to leveraging our own core capabilities, TOWER Medical has had
success working with financial advisers and we look forward to working with
them to further develop this important distribution channel to grow market
share," Mr Fitzgibbon added.
Mr Flannagan said TOWER would be working closely with nib to ensure that
customers continued to receive the high standards of service they had come to
expect from TOWER Medical Insurance Limited.
"nib's customer service expertise and strong track record in medical
insurance will bring obvious benefits to our customers and the broader New
Zealand market.
"We look forward to working together with nib and to building a long-term
relationship that will deliver benefits to TOWER customers through the
insights, expertise and strong track record in medical insurance that nib
will bring to the New Zealand market."
Mr Flannagan said the TOWER Board was satisfied with the sale price of
approximately $102 million that had been achieved. Capital management was a
key focus for the Board, and it intended repaying capital to shareholders of
not less than the proceeds of the sale.
The sale of TOWER Medical Insurance Limited to nib is subject to Overseas
Investment Office approval and other conditions customary for a transaction
of this type. Subject to satisfaction and timing of conditions, settlement is
likely to occur before 31 December 2012.
TOWER expects its Group net profit after tax for the year ended 30 September
2012 to exceed the upper end of published analyst ranges. Net profit after
tax is expected to be in the range of $51 million to $56 million, including a
positive $9 million discount rate effect.
Ends
For further information, please contact:
Rob Flannagan
Group Managing Director
TOWER Limited
Tel: +64 9 369 2279
ARBN 088 481 234 Incorporated in New Zealand
End CA:00229257 For:TWR Type:ASSET Time:2012-11-02 09:58:21
