NZ-owned insurer, Fidelity Life, is understood to be closing in on the risk insurance business of rival, and one-time suitor, Tower.
Industry insiders have indicated Fidelity has almost finalised the deal, which would see it fulfill a long-term ambition of purchasing the Tower life insurance arm. One source said Fidelity was working with reinsurer, Swiss Re, to secure part of the funding for the deal.
If confirmed, the purchase would be a sweet reversal of fortune for Fidelity, which was on the receiving end of a hostile takeover offer from Tower in 2010.
The failed 2010 bid by Tower valued Fidelity at $118 million or $82 per share. Since the takeover offer, the tightly-held Fidelity shares, which were trading in the mid $75-$80 range, have remained above $90 with the current price set at $95.
Tower, whose major shareholder is GPG, has been widely tipped to sell down assets, with rumours of further sales strengthened after the group sold its medical insurance business to Australian firm nib last November for over $100 million.
