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Suncorp quits Tower takeover appeal

Suncorp has dropped an appeal against the New Zealand regulator’s decision to block its proposed takeover of insurer Tower.

It continues to hold a 19.99% stake in Tower through its Vero Insurance New Zealand subsidiary, but has reconsidered the appeal due to the risk of proceeding and the lapse of an agreed arrangement.

Tower last Monday advised it will terminate a scheme implementation agreement, but says it is willing to negotiate a new version which may result in changes to key terms, after it completes plans to raise capital.

A Suncorp spokesman says the company has now reviewed the full decision by New Zealand’s Commerce Commission.

“While we were confident that we have a strong case, there was significant litigation risk to proceeding with an appeal,” he told insuranceNEWS.com.au.

“We have decided to act in the best interests of our shareholders and not take the appeal any further.”

Suncorp says it is focused on maximising the value of its Tower shareholding.

Commerce Commission Chairman Mark Berry said in July the merger could “substantially lessen” competition in the personal insurance market, leaving only Vero and IAG as significant insurers in the space.

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