Archive for December, 2010

Tower insurance shares soar 42%

on directors’ Dai-ichi nod

December 29, 2010

Australia Tower Group shares surged 42 per cent to a record high as investors supported an all-cash takeover offer from the company’s Japanese cornerstone investor Dai-ichi Life Insurance.

Tower said today its directors recommended shareholders accepted Dai-ichi’s $4 per share, or $1.2 billion, offer to buy all shares it does not already own in the specialist life insurer.

The stock touched $3.88 – Tower’s highest-ever share price since splitting from New Zealand-based Tower in December 2006 – before closing up $1.14, or 41.8 per cent, at $3.87.

Over 20 million shares were traded during the day, Tower’s best daily turnover since October 2008.

IG Markets strategist Ben Potter said the hefty 46.5 per centage  premium to the Christmas Eve closing share price of $2.73 would have ruled out a competing offer.

‘‘I’d be expecting no other bidders around that price,’’ Mr Potter said.‘‘I don’t think people wouls have to think too long and hard about selling their shares at $4.’’

Dai-ichi’s offer to buy the remaining 71.04 per cent of Tower, made yesterday, valued all of Tower at $1.76 billion.

Dai-ichi general manager of international business management department, Takayuki Kotani, said the deal allowed Japan’s number two life insurer to increase its geographic diversification in the Asia Pacific region.

Mr Kotani described Tower as a profitable, growing company with good management and he flagged having a greater presence in Australia in the time ahead.

‘‘Beginning with this investment, Dai-ichi will strengthen its commitment to Australian marketplace over a period of time,’’ Mr Kotani said in a statement.

Dai-ichi, which bought its stake in Tower in August 2008 for $376.3 million and also holds insurance interests in Vietnam, Thailand and India, indicated it wished to keep the Australian insurer’s current management and independent directors in place.

Tower chairman Rob Thomas said the independent directors believed that the offer represented a ‘‘compelling premium and a highly attractive outcome’’ for shareholders.

Managing director Jim Minto said having Dai-ichi as a cornerstone shareholder for the past two years had been of great benefit to Tower’s business partners and customers.

‘‘Dai-ichi is a major life company and there is a strong natural fit that will allow continued benefits to flow for Tower’s customers, staff and business partners,’’ Mr Minto said in his statement.

Dai-ichi listed on the Tokyo stock exchange in April this year, after an initial public offering that raised $US11 billion ($10.92 billion).

Tower’s yearly results, released last month, showed the specialist life insurer’s net profit rose 88 per cent to $87.4 million in fiscal 2010 and a return on capital of 10.3 per cent.

The company did not release earnings guidlines, but said at the time it was targeting an 11 per cent return on capital in fiscal 2011 and a 13 per cent return in three years.

The directors’ recommendation of the Dai-ichi bid, which would be via a scheme of arrangement, is subject to the absence of a superior proposal and the outcome of an independent expert’s report.

It also requires court approval, the go-ahead of Tower shareholders, as well as the go ahead from Australian and Japanese authorities.

Sourced & published by Henry Sapiecha

Groupon entering Australia

& daily deals sites ignite

Julian Lee

December 29, 2010

THE world’s largest daily deals website, Groupon, which Google tried to buy this month for $US6 billion, has confirmed it is entering the Australian market.

The company is recruiting people to sign up to its email database before a launch next month into a market that is becoming crowded. The No. 2 player, Living Social, abandoned plans to start from scratch in Australia, opting instead for a joint venture with an existing company, Jumponit. 

But because an existing Australian deals company has had its application to use the Groupon name in Australia approved, the Chicago company has been forced to use the domain name of Stardeals in Australia.

Groupon has engaged the lawyers Clayton Utz to take action against Scoopon, a Victorian company that has been offering online deals on products and services in Australian cities for more than four years.

Groupon lodged an intellectual property action in the Federal Court in Victoria in August and is due to go for mediation on January 21 or, failing that, to the courts on February 4.

Groupon is also taking Scoopon to court in its home state of Illinois, claiming federal trademark infringement, unfair competition and deceptive trade practices, even though Scoopon’s business is limited to Australian shores.

Do a deal a day websites offer discounts from local retailers, merchants and leisure operators, thereby restricting their operations to local businesses and consumers.

A Groupon spokeswoman, Julie Mossler, said: “The [Stardeals] site is live to accept subscribers but we are not yet offering deals currently. We hope to do so in the next month.”

An intellectual property lawyer, Trevor Choy, said Groupon was paying the price for failing to register its trademark or name as it expanded globally. The US case was doomed to fail, he said. “Groupon’s lawyers should have known that US trademarks can’t be enforced outside of the US against a company not doing business there.”

Sourced & published by Henry Sapiecha