MFS prepares itself for takeover
An article in the Herald Sun says that Andrew Peacock-chaired MFS has gone into a trading halt as it prepares itself for a takeover by fellow Gold Coast financier City Pacific.
But the merger push was undermined yesterday as City Pacific’s share price hit a year low of $3.16 before recovering to close at $3.37.
The 5 per cent decline reduces the value of the bid by about $75 million to $758 million.
However, City Pacific pushed ahead with its takeover, yesterday unveiling a team of high-powered advisers to help with its bid.
Babcock & Brown and Adelaide merchant bankers Equity & Advisory are to be joint lead advisers, with legal affairs handled by Mallesons Stephen Jaques, accounting by Ernst & Young and Brisbane risk consultancy Financial Services Consulting in charge of statutory compliance.
MFS told the stock exchange the trading halt would give it time to figure out how to separate itself from tourism arm Stella, which is not part of City Pacific’s offer.
On Monday, City Pacific made a conditional all-scrip bid for the fund management arm of MFS.
Under the deal 225 million City Pacific shares would be distributed to existing MFS shareholders.
The bid values City Pacific’s shares at $3.70, giving the deal a value of about $833 million.
The merged entity would have about $10 billion in funds under management and direct debt of about $600 million.
Stella Tourism, put together by MFS at a total cost of about $1.9 billion, would remain in the listed MFS vehicle.
An attempt in August to sell half of Stella to private equity outfit CVC Asia Pacific failed after CVC baulked at the $1 billion price tag.
MFS shares were trading at $3.18 before the halt.
A Report by The Mole from The Herald Sun
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