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Japan's Dai-ichi Life Insurance has launched a $1.68 billion friendly takeover offer for Tower Australia Group Ltd (ASX:TAL), in a bid to secure the 70 per cent stake in the Australian insurer it does not already own.

Last night, Tower's directors gave the proposed merger their initial backing and are expected to issue a formal recommendation to shareholders today morning.

Dai-ichi says it plans to offer $4 a share for the majority stake in the form of a scheme of arrangement, representing a 46.2 per cent premium to Tower's one-month average share price.

For the year ended 30 September 2010, Tower Australia reported a net profit of $87 billion.