Goldman Sachs and Forsyth Barr have been mandated to sell Bain Capital’s 19.9 per cent stake in the $462.4m Tower Insurance.
The Australia and New Zealand company confirmed Bain’s move to offload its stake on Monday in a statement to the Australian Securities Exchange.
Shares are being offered at $NZ1.30, which is a 12.5 per cent discount to its last traded price of $NZ1.49.
The $NZ89m selldown by the private equity firm comes as the investment comes to the end of its holding period within its fund.
Tower entered a trading halt to allow for the selldown until Wednesday.
Bain owns or controls 68.3m shares in Tower, and they are being broadly marketed to both institutional and retail shareholders.
The selldown comes after the New Zealand insurance business was last year up for sale through Goldman Sachs.
Suncorp’s New Zealand subsidiary, Vero, made efforts to buy the business in 2017 at $NZ1.40 a share, but its $200m-plus offer was blocked by the competition watchdog. Bain snapped up the holding a year later, at NZ80c a share.
New Zealand-based Tower provides car, home, contents, business, boat, pet, travel and other general insurance.
Tower’s shares have rallied in the past year.
Rising interest rates means insurers generate more earnings from their regulatory capital and their policies are indexed to inflation, so they can pass on higher costs.
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