TOWER to proceed with spin-off of Australian Wealth Management Businesses and AWM Capital Raising 

TOWER Limited ("TOWER") announced on 13 September 2004 that it was considering the separate listing on the Australian Stock Exchange (“ASX”) of its Australian Wealth Management businesses, and had appointed Caliburn Partnership Pty. Ltd. ("Caliburn") to review the proposal. Caliburn's review has been completed and as a result the Board has determined to proceed with the spin-off, subject to shareholder and Court approval.

Olaf O'Duill, TOWER Chairman, said, “The Board believes the spin-off of TOWER's Australian Wealth Management business would provide a more focused strategy for each separately listed entity."

Key features of the proposal:

• TOWER will transfer its Australian Wealth Management businesses, comprising Bridges and TOWER Trust, into a new company, Australian Wealth Management Limited ("AWM"), in exchange for approximately 120 million A$1.00 shares in AWM and a cash payment of A$130 million
  
• These 120 million shares in AWM will then be transferred to existing TOWER shareholders and, in consideration, an approximately equivalent value of TOWER shares held by existing TOWER shareholders will be acquired and cancelled via a New Zealand Court approved Scheme of Arrangement, requiring shareholder approval
  
• AWM will be listed on the Australian Stock Exchange
  
• AWM will undertake a capital raising of approximately A$130 million, by way of an entitlements offer of additional shares in AWM to make the cash payment to TOWER
  
• The entitlements offer will be renounceable, allowing shareholders to sell their entitlements in the event they do not wish to subscribe for additional shares in AWM
  
• The entitlements offer will be fully underwritten by GPG on terms to be approved by shareholders.
  Following the Scheme and completion of the capital raising, TOWER will have no equity interest in AWM. 

TOWER will use the A$130 million proceeds received from AWM to provide additional capital flexibility in pursuing its strategies for growth and new business development.

Expected timing:

• Detailed information regarding the Scheme and capital raising will be provided to shareholders in early December 2004
  
• A shareholders’ meeting to approve the Scheme will be held in late January 2005
  
• It is expected that the listing of AWM on the ASX and entitlements trading will occur in February 2005.

TOWER expects to lodge the Scheme documents with regulatory bodies in early December 2004 and accordingly it will be in a position to provide further details regarding the proposal at that time. 

Under the Proposal, TOWER and AWM Limited (AWM) are considering making the offers of securities referred to in this announcement. No money is currently being sought and applications will not be accepted nor money received until shareholders have received a Prospectus/Investment Statement.

Caliburn is advising TOWER on the transaction.

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