On Thursday, New Zealand insurer Tower Ltd said that it has agreed to sell all its shares to Fairfax Financial for NZ$197 million (approximately C$186 million).
The deal was unanimously approved by Tower’s board.
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Reuters reported that Fairfax will pay Tower shareholders NZ$1.17 per share, with a premium of 48% to the NZ firm’s closing price on Feb. 8. Shares in Tower, with a market capitalization of NZ$187 million, surged 40.5% after the announcement to a five-month high of NZ$1.11.
“The acquisition of Tower will provide us with an immediate significant presence, with a strong management team ... in a market where Fairfax currently has limited exposure,” said Fairfax chairman and CEO Prem Watsa.
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The proposed deal is subject to customary conditions. It will need the approvals of the Reserve Bank of New Zealand, the New Zealand Overseas Investment Office, Pacific Islands regulatory authorities and Tower shareholders.
Currently, Tower is the third-largest insurance group in New Zealand, serving 265,000 customers. The company offers auto, homeowners’, contents, business, travel, and other personal insurance lines.
