Trans-Tasman financial services group Tower is the subject of much attention after key shareholders’ attempts to come up with an alternative capital-raising plan to overthrow the proposals of Guinness Peat Group (GPG).  

Time is running out for the group, which is under pressure to repay at least $200 million in debt by August 8. But shareholders don’t like the thought of GPG holding a 30% stake in the company, and media speculation suggests NZ company Hanover Group, which currently owns 4.3% of the company, is forming a plan of its own to become a “cornerstone” shareholder.

Analysts say the GPG proposal concerns shareholders because they see GPG gaining a major stake through a discounted placement of shares, followed by a rights issue, without paying a premium.

Hanover Chairman Mark Hotchin said the decision by Tower to raise $200 million in capital had many ramifications. “Tower has considerable attributes including a very strong brand, strength in financial services [and is] a very logical and close fit to our existing business,” he said.

GPG Director Tony Gibbs said if the deal is voted down at a shareholders’ meeting on July 4, the group will consider pulling out.