The grapevine is still humming over the identity of a mystery buyer seeking a chunk of financial services company Tower and whether this could be the start of a takeover bid.

Although no one has come clean as yet on who is interested, sharebroker JBWere is understood to have bought around 3 or 4% of Tower at $1.80 a share.

Having had a rough year, alarms bells started ringing for Tower in November when it issued a profit warning anticipating a year end loss of up to $40 million.

In early December things got worse when the company announced a full year loss of $75 million. About half of the loss came from the write down of Tower’s Australian operation, Bridges.

As shareholders have bailed out, this new buy-in has started rumours of a possible take over bid.

Tower’s acting chief executive, Keith Taylor, says he is unaware of the identity of the mystery purchaser.

"When you are a listed company you are always open to people buying shares and moving to a takeover offer. But at this stage it is just a few shares which have been bought."

Under New Zealand listing rules if the buy up took one owner’s holding to over 5%, a shareholder notice would have to be lodged.

Alliance Capital Management analyst John Norling, says although speculation about the buyer has included Royal &SunAlliance (RSA) and AXA he says he thinks its unlikely.

RSA is in the middle of preparing for its own public offering.

As AXA already owns 9% of Tower, any further purchase would have required a shareholder notice to be filed.

Other speculation surrounds Guiness Peat Group.

Norling says if it is a buyer like GPG, he would expect to see them agitating for change at board rather than management level.

In December, Tower announced that Jim Minto had been appointed as ceo of Tower Australia from an acting capacity.

But Tower’s New Zealand business has been without a permanent chief executive since July when James Boonzaier stood down after 12 years with the company.

Tower’s chairman Colin Beyer has been publicly laying the blame for Tower’s problems with Boonzaier.

Norling, says at its current price Tower shares are certainly an attractive buy, but any advice to purchase would be tempered by analysts’ concerns over capital adequacy and the state of the company’s management.

Taylor says that although the buy in has pushed share prices up, they are still "significantly lower than they should be".

"I certainly hope we have a better year next year. We have now got a good business going forward and I am confident we will have a better year next year."