Hanover mum on Tower strategy

By PAUL PANCKHURST

After building a 9.5 per cent stake worth $47 million in the troubled insurer Tower, the Eric Watson and Mark Hotchin-owned Hanover Group is coy on how much further it may go.

"We're keeping our cards close to our chest," said chief executive Kerry Finnigan yesterday.

He would not say how much money Hanover, the financial services group that includes Elders Finance, had on hand for buying more shares.

Corporate raider Guinness Peat Group is Tower's largest shareholder at 17.1 per cent.

It is expected to move to 19.9 per cent, just below the so-called "no-fly zone" of the takeover rules.

A substantial security holder notice on Thursday afternoon disclosed that Hanover, the second largest shareholder, had increased its stake from 6.3 per cent via Tower's rights issue.

Hanover's stake is now effectively big enough to block a full takeover of Tower.

GPG director Tony Gibbs described Hanover's move as "a bit of a non-event - I haven't really got much to say about it".

Finnigan said Hanover wanted to talk to Tower about a seat on the board, but knew it was not a certainty or a right.

GPG and Hanover clashed over GPG's initial capital-raising plan for Tower, later replaced by the just-completed $211 million four-for-three rights issue.

Tower said yesterday that the proceeds of the rights issue and the sale of Tower Trust New Zealand had been used to repay A$270 million ($300 million) in debt.

Shares in Tower closed up 1c at $1.22.