Tower shareholders are in for a windfall of up to 55c a share as the insurance company returns a total of $114 million in capital, with $70 million being paid out in the first tranche.
Craigs Investment Partners broker Chris Timms said the company had previously indicated it would return the capital but there had been no details on timing or the amount.
Tower had indicated the first tranche of 34c a share would be paid ''as soon as practicable'' and the remaining 21c would be paid when ''appropriate''.
Tower is 34% owned by Guinness Peat Group.
It sold its life business to Fidelity Life Assurance for about $145 million in cash and liabilities in May.
In determining what capital was available, Tower had to take into account the Reserve Bank's requirements for its insurance licences, including an increase in its minimum solvency margins.
Last month, Tower said it had concluded talks with the central bank.
''We continue to review our capital management plan following the issue of full licences for our general insurance and retained life insurance businesses,'' Tower chief executive David Hancock said in a statement.
''With minimum solvency margin requirements now confirmed, it was appropriate that some capital realised from the execution of Tower's strategic review, and which was surplus to capital and business requirements, was returned to shareholders.''
It was now appropriate for some capital to be returned to shareholders, he said.
Mr Timms said the share price had fallen from its high of more than $2 in July last year and had recently been trading around $1.80. It last traded up 1.1% to $1.83.
''I expect we will see a bit of buying as people look for the distribution, similar as we see the buying into the dividends.''
Asset sales had released $370 million of capital, of which $120 million had already been distributed.
GPG stood to get about $24 million from the life business sale, he said.
