Vero is giving up in its battle with the Commerce Commission to get the green light to take over Tower.
Tower is still pushing on with the appeal, which will be heard in late January.
Vero’s move comes further to the Scheme Implementation Agreement it signed with Tower to buy all its shares, passing its end date and being terminated by Tower.
While Tower has advised Vero it is willing to negotiate a new agreement, “which may result in changes to key terms”, Vero says it’s “focused on maximising the value of its Tower shareholding”.
Vero has a 19.99% blocking stake in Tower, which the Commerce Commission is investigating under section 47 of the Commerce Act.
Tower says negotiations around a new agreement could occur once the insurer completes its plans to raise more capital.
Details around this will be revealed when Tower releases its full year results on November 14.
Tower’s share price has fallen on today’s news. It sits at 78.5 cents (as at 12.45pm). This time two years ago it was at $2.06.
The New Zealand insurer has struggled to recover from the 2010/11 Canterbury earthquakes.
While it last year proposed to ring-fence its problematic quake-related business, it has this year welcomed takeover bids from Vero and Canadian giant, Fairfax Financial Holdings.