Shares in life insurer Tower Australia jumped more than 40 per cent yesterday after it unanimously recommended shareholders accept a takeover offer from Japan’s Dai-ichi Life Insurance Co.
Shares closed up 41.76 per cent at A$3.87, one day after Dai-ichi said it would take over the mid-sized Australian company by May as it seeks to shore up its business in growing overseas markets.
The Japanese firm is already the largest shareholder in Tower, with a 28.96 per cent stake, and to take full control plans to make an additional share purchase, through a tender offer, for about 99.6 billion yen ($1.21 billion).
Tower said the A$4 per share offer represented a 46.5 per cent premium on Tower’s last traded price on December 24.
“The independent directors believe that this offer represents a compelling premium and a highly attractive outcome for our shareholders,” Tower chairman Rob Thomas said in a statement.
The deal for Dai-ichi, Japan’s second-largest life insurer, would be its first acquisition since the company went public in April.