MFS reassesses S8 bid
it is reported that MFS is seriously reassessing its takeover offer for S8, with the what appeared to be a done done deal hitting further snags, issuing a supplementary bidder’s statement to the stock exchange in its bid for Australia’s largest travel company.
It revealed two further hitches in a takeover bid already affected by the refusal of the James Packer-linked Challenger Financial Services Group to accept the MFS bid for the 50.1% of the S8 convertible notes it holds, but also the resingation of the CEO of Gullivers Travel, the New Zealand travel company taken over by S8 recently and a prominent Queensland travel agent switching nine Harvey World Travel agencies to S8’s main competitor, Flight Centre.
It is reported that MFS is considering the effect of both events on its bid and S8.
Gullivers chief Bruce Cotterill was supposed to be a member of the senior management team of the merged S8-Gullivers, but the New Zealander resigned not long after being appointed head of Australasian travel, based in Sydney.
Prominent Queensland travel agent Debbie Giudes recently switched her 10 agencies, located between Brisbane and Cairns, to a Flight Centre brand, with nine having traded under the Harvey World Travel banner.
MFS is offering 1.15 of its own shares for each S8 share, or alternatively, one MFS share plus 70c cash for each S8 share. It is offering one MFS note, 14 warrants and a cash payment equal to the amount of any accrued interest on the S8 note up to the issue date of the MFS scrip.
Challenger has refused to comment on the bid publicly, but is believed to be holding out for about 20% more than the $105 a note it stands to receive, however, MFS is adamant it has made its best offer, needing to get 90% of both shares and notes to make its offer unconditional.
Challenger is also entitled to convert its notes into S8 shares, and if it did, it would own more than 10% of the company.
S8 directors, including chief executive Chris Scott, the company’s founder and largest shareholder, have recommended the bid to shareholders, with the board holding 32% of the company, but MFS now owning 40.6%.
If the bid is successful, it will create a company with a market capitalisation of $1.7 billion.
Report by The Mole
John Alwyn-Jones
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