Tower to Raise A$160 Million in Australian Spinoff

Tower Ltd. (TWR), New Zealand's third- biggest fund manager for individuals, plans to raise A$160 million ($120 million) selling shares in Tower Australia as part of its spinoff of the unit.

Tower will offer the shares at A$1.60 apiece, the Wellington-based company said in documents released to the New Zealand stock exchange today. Guinness Peat Group Plc, which owns about 20 percent of Tower, will underwrite the share sale.

Jim Minto, Tower's managing director, will become head of the Australian company, which will trade on the Australian Stock Exchange as Tower Australia Group Ltd. Rob Flannagan will be chief executive of its New Zealand unit. Shares of Tower closed 3 cents, or 1 percent, lower to NZ$3.14 in Wellington.

Tower forecast net profit of NZ$61.7 million ($41 million) in the year to Sept. 30. The group's profit in 2005 was NZ$119.3 million, which included a one-time gain from the sale of its Australian Wealth Management Ltd. unit.

Shareholders will vote on the spinoff in November. The group's Australian operations comprise about 60 percent of the value of Tower's business, Minto said last month.

To contact the reporter on this story: Jonathan Underhill in Wellington

To contact the editor responsible for this story: Brett Miller

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