By PAUL PANCKHURST
It is another week of Tower and trees. Today, the rights for the $210 million share issue to recapitalise the troubled insurance company start trading on the New Zealand and Australian stock exchanges.
An investment statement and prospectus is being mailed to shareholders today and tomorrow and the
issue is open for two weeks.
The large number of small shareholders on the firm's register is prompting speculation on the size of the shortfall to be vacuumed up by the underwriter, Guinness Peat Group, and the sub-underwriters.
The market will also be seeing if big shareholders snap up the rights.
Shareholders are being offered four shares for every three they already have, at 90c per share.
Friday's closing price of $1.57 should translate into an ex-rights share price of $1.19.
The Takeovers Panel is expected to decide today on GPG's application for an exemption to takeover rules.
It told the firm to apply due to the possibility of the underwriting deal pushing GPG past 20 per cent and into the so-called "no fly zone".
Tower group managing director Keith Taylor believed there was no chance of the "huge" shortfall in take-up - 35 per cent to 40 per cent - needed to push GPG over the limit.
The focus turns to trees on Wednesday, when forestry giant Carter Holt Harvey announces its second-quarter earnings.
On Friday, one analyst contacted by the Business Herald forecasted a net profit of $42 million and earnings before interest and tax of $68 million - in line with previous estimates.
Earnings will be down on the first quarter. The big factor: the 88-day strike at the Kinleith mill.
