Tower Running Favourite As Bridges Race Nears Finish Line
Sydney Morning Herald
Wednesday August 30, 2000
New Zealand fund manager and insurer Tower is believed to be the frontrunner to buy Bridges Financial Services for more than $100 million and is expected to raise equity through adviser Deutsche Bank to fund the deal.
After a long-running process, it is understood that Bridges' owner, Credit Union Services Corp of Australia, could announce a sale within the next few weeks.
A spokesman for CUSCAL said: ``We are not prepared to comment on the process other than to confirm that the CUSCAL board has not made a decision."
However, two parties are believed to have been short-listed, Tower and Mercantile Mutual.
Bridges is one of the few significant financial planning networks up for sale with a 110-strong financial planning workforce, 45,000 customers and $2.5 billion under management.
In July Tower bought the trustee business of IOOF, but managing director Mr James Boonzaier has readily indicated it wants to buy more assets to bolster its performance. It is unclear if Tower also has more acquisitions in mind because it is said to be prepared to raise several hundred million dollars.
Tower fell 5c to $3.90.
The other party said to have been keen to buy Bridges is Mercantile Mutual. AMP, another mooted buyer, was not invited to tender, while Credit Suisse Asset Management supposedly was another earlier contender. Other mooted buyers were Merrill Lynch and AXA Asia Pacific.
CUSCAL has appointed Gresham Partners to find a buyer, in whole or in part, for the business.
An acquisition by Tower would represent a substantial move, given the company has suffered a loss of wholesale mandates after recently losing its equities team.
Some banks had shown an interest, but CUSCAL has been selective in who it has allowed to undertake due diligence and hasn't been eager to sell the business to any organisation it views as a competitor and not a long-term supporter of the credit union movement.
FACT FILE
Tower tipped as frontrunner; planning to raise equity to fund deal.
Mercantile Mutual also said to be interested.
Announcement expected soon but CUSCAL board yet to sign off on deal.
Would further consolidate financial planning industry.
© 2000 Sydney Morning Herald
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