New Zealand insurance group Tower is looking at restructure offers from a range of companies and may even be taken over following an internal review by senior management and investment bank Goldman Sachs.

The review and subsequent expressions of interest come as Tower seeks to address what it sees as its undervaluation by the New Zealand sharemarket.

“We are trading below net tangible asset backing, so the sum of the parts is worth more than the whole,” Tower MD Rob Flannagan told insuranceNEWS.com.au.

“The board is open to changing Tower’s business structure to improve the value achieved for shareholders and is considering proposals, including operational alliances and divestment of assets.

“We’re examining proposals to see if they are real or not. If they add value we’ll have to consider them.”

Proposals involve partnerships “in various areas and distribution arrangements”, but “one option could be for someone to buy the whole group”, Mr Flannagan said. “We haven’t had that put to us yet.”

The move to restructure is given impetus by the fact 33.6% owner Guinness Peat Group (GPG) wants to sell out and believes the company is undervalued.

GPG Chairman Rob Campbell says Tower should “embark on an immediate process to optimise the structure and composition of its businesses”.

GPG’s desire to liquidate its assets also triggered the $242 million takeover bid for Australian group ClearView Wealth. It is to sell its 47.8% stake under a bid by private equity group Crescent Capital. The market and ClearView MD Simon Swanson believe the bid is below fair value.

Tower has a market capitalisation of $NZ484 million ($381.81 million) and its shares are trading at about $NZ1.80 ($1.42). Mr Flannagan says consensus among analysts is they are worth $NZ2.10 ($1.65) or more.

He says the company hopes to investigate all options by February as “we’d like to take any proposals to the AGM that month”.

Tower sits in the mid-range of New Zealand insurers, with about 9% of the market, while leaders IAG NZ and Vero have 40% and 27% respectively.

Bill Falconer has stepped down early as Tower chairman so a new chairman can implement the strategic shift. Independent board member Steve Smith is serving as interim chairman pending a new appointment.

In its profit report for the half-year to March 31 Tower’s bottom-line result was up 83% to $NZ23.38 million ($18.44 million).