Shares in life insurer Tower Australia jumped more than 40 per cent yesterday after it unanimously recommended shareholders accept a takeover offer from Japan’s Dai-ichi Life Insurance Co.

Shares closed up 41.76 per cent at A$3.87, one day after Dai-ichi said it would take over the mid-sized Australian company by May as it seeks to shore up its business in growing overseas markets.

The Japanese firm is already the largest shareholder in Tower, with a 28.96 per cent stake, and to take full control plans to make an additional share purchase, through a tender offer, for about 99.6 billion yen ($1.21 billion).

Tower said the A$4 per share offer represented a 46.5 per cent premium on Tower’s last traded price on December 24.

“The independent directors believe that this offer represents a compelling premium and a highly attractive outcome for our shareholders,” Tower chairman Rob Thomas said in a statement.

The deal for Dai-ichi, Japan’s second-largest life insurer, would be its first acquisition since the company went public in April.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.