Institutions considering making a trade bid for the wealth management arm of Tower ahead of a possible move to separately list the business unit have been warned they are likely to struggle to appease all stakeholders involved, including more than 150 planners from the Bridges Financial Planning group.
Tower head of wealth management Andrew Barnes, speaking after the group acknowledged several acquisition enquiries had been made last week, warns any aggressive play for the business would not be supported internally.
“Frankly, a hostile or unsuitable purchaser would not get the support of the planners and as a consequence, the purchaser would in effect be buying into an empty shell,” Barnes says.
Meanwhile, Tower group chief executive Keith Taylor, while not ruling out a trade sale, says the likely outcome of a review being conducted by the Caliburn consulting group would be a separate listing of the wealth management arm, which comprises Bridges and Tower Trust.
“Nothing’s certain in life, but we’re fully committed to a spin off and any other outcome is an unlikely one,” Taylor told Money Management.
Barnes agrees with Taylor in that a trade sale in this instance would be very difficult, despite what he deemed have been “fairly glib comments from analysts”.
“Buying a business is one thing, but it’s bloody difficult going forward if the management, the planners and the shareholders’ interests are not totally aligned. Especially as we will have GPG [Guinness Peat Group] as a major shareholder and obviously the planning business of Bridges will form a considerable piece of the entity,” he says.
The board of Tower was scheduled to meet earlier this week in Wellington, New Zealand, however, Barnes says the gathering was not a swiftly convened meeting to discuss the issues relating to the wealth management arm.
“The board would obviously make an active decision as to the spin off option along with all the other options once it gets final sign-off from our advisers, and that is the way we wish to proceed,” Taylor adds.
