Hi, someone mentioned this one on another forum yesterday.
I ran my eye over it and couldn't see anything wrong with it. SP has been in downtrend after a number of aquisitions, but it may have good growth potential. The presentation released today looks good to me.
I am a bit margined out at the moment so was only able to stick $4k on it.
Note: the figures on commsec are rubbish - infact it took me a while to get an idea of thier financial postition.
Please do your own research etc.
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This could be a ...R
el_ninj0
7th-April-2005, 05:50 PM
Hi, someone mentioned this one on another forum yesterday.
I ran my eye over it and couldn't see anything wrong with it. SP has been in downtrend after a number of aquisitions, but it may have good growth potential. The presentation released today looks good to me.
I am a bit margined out at the moment so was only able to stick $4k on it.
Note: the figures on commsec are rubbish - infact it took me a while to get an idea of thier financial postition.
Please do your own research etc.
.................................................. ....P
...........................................M
..................................A
This could be a ...R
I wouldn't be putting my money on any investment funds this year. Atleast not yet. Wait until we see what happens with the XJO is my opinion.
markrmau
9th-April-2005, 04:36 AM
One of the directors seems to disagree and is loading up ($160k in last few days).
Just wait till the snow season begins and they start announcing earnings.
markrmau
12th-April-2005, 06:52 AM
One final ramp before I go away and sulk.
The stochastic oscillator is giving a nice signal that a trend reversal is underway. The price SP made new lows yesterday which was not confirmed by the slow stochastic oscillator (see blue lines).
Remember that convergences/divergences are the ONLY valid buy/sell signals.
RichKid
12th-April-2005, 02:11 PM
Hi Markmau,
This is not one for me, has convincingly broken the longterm uptrend and is clearly yet to show signs of reversing this steep downtrend. Has had some wide ranging days too so could be hard to set stops. Volume has picked up so that's a good sign, also good to see directors buying since March, only a small amount directly held but still better than nothing. Maybe they expect a rerating soon (or some special news), who knows, even directors get it wrong at times.
Sorry if this sounds negative, often better to take a small loss than a big one. Just my views based on my interpretation of the chart. The long term chart shows the slowing momentum and recent top followed by that dangerous gap down, no solid support nearby imo, maybe $1?? Wonder why it fell so steeply, was it increasing interest rates (would affect their large leisure property portfolio) or economic uncertainty affecting visitor numbers?? There is also the risk associated with the recent Peppers acquisition, might take awhile for things to smooth out. One thing I do notice from the chart is that around May/June of the last few years there has been a sudden spike, short lived so may be a good time to exit- is it the ski season effect as you mention??
I don't know much about indicators so don't know how accurate it is. Keep us posted on any recovery in the sp, currently at $1.28....
markrmau
13th-April-2005, 04:08 AM
Well we wouldn't have a market if everyone agreed. Up slightly on high volume today, but I will agree that it is high risk. Someone wants to get out real bad.
markrmau
12th-May-2005, 11:56 AM
Obviously, this got hammered along with all small caps over the last few weeks. However, it now seems to have broken out.... I will wait for end of day trading for confirmation, and perhaps cost average UPWARDS.
markrmau
28th-September-2005, 10:33 AM
Keep us posted on any recovery in the sp, currently at $1.28....
Recovered somewhat ;)
robert toms
31st-May-2006, 11:56 AM
I got into this one through the Breakfree takeover,and for me,hold a sizeable amount-just under 16000.This has,until now,probably been the most successful buy that I have made.
However they recently floated HFA,a funds management business,and invited shareholders to apply for shares in the float via a priority offer.
When I tried to get into the IPO I could not get a prospectus.Market link Services who ran the IPO claimed twice to have sent one to me,once by express post.(they could never provide me with the receipt no.for the express post)
My enquiries with Market Link Services and MFS have either led to no answers or prevarications.What I believe happened was that MFS got too much interest from the big end of town for the float,and after initially offering the IPO to small investors,withdrew the offer.
Interesting the trail of deception that you get along the way though.
The waterhole has been poisoned now and they can shove their floats.
scsl
11th-June-2006, 04:50 AM
Robert, I’ve got to agree with you on that…I bought Breakfree in December 2005, only to have it taken over a month later. MFS has since been my best performing company.
It’s a real pity though that Link Market Services weren’t able to send you a prospectus. I thought HFA had a pretty convincing future and applied for some shares. But due to an “overwhelming response from investors”, my priority offer application was scaled backed a fair bit! It seems the folks at UBS were able to do a pretty damn good job selling the IPO, enough for it to be “heavily oversubscribed”. It ended the first day at $1.39, a 26% premium over its $1.10 offer price.
Have you bought (or will you buy) HFA since it was floated? Since going down to $1.26 on the 30 May, it has rebounded to $1.55, 23% in less than two weeks! I missed out and am looking to buy next time it retreats…
I think that like MFS’ growth potential, HFA Holdings Ltd has enormous potential in the absolute return fund sector. Already a major player in this rapidly expanding sector, HFA is set to gain from the fast growing amounts of money pouring into the wealth management industry. The MFS Board, who have constantly under-promised and over-delivered, “remain committed to further growth in HFA and believe it has substantial ongoing prospects”.
HFA was acquired by MFS for approximately $3 million less than three years ago and is now worth more than $300 million. Through the IPO in which it retains a 38.7% holding, MFS has no doubt crystallised a massive profit which will mean more cash to pursue other opportunities – here’s hoping they find more of these HFA type investments!
As for the asset managing MFS, MD Phil Adams has likened it to a “mini-Babcock & Brown”, with a great deal of its earnings coming from management and performance fees from related investment vehicles such as MFS Diversified Trust, MFS Living and the PrimeLiving Trust. As it becomes increasingly known to the investment community that it has similar characteristics to Babcock & Brown, Macquarie Bank and Record Investments, MFS shareholders will definitely welcome further re-rating of the stock. UBS expects MFS to achieve a $A69 million net profit for the 2006-07 financial year, and its share price target for the stock is $5.05. MFS last traded at $4.08.
MFS and HFA are definitely worth having a closer look at…particularly MFS, which is down from its very recent record high of $4.51.
robert toms
11th-June-2006, 03:29 PM
Yes they certainly look to have good growth prospects.I looked to HFA when they dipped to $1.30,but I was half-hearted and missed that chance.MFS itself holds over thirty percent in HFA and that should see them reaping some rewards from HFA...if there are any of course....
There must be a lot of positive sentiment toward this sort of fund...HFA...because there are no results evident as yet to support this price...only what was in the prospectus.
I could not get a prospectus...market link services said that they sent me two ...the last one by express post.I was told twice that they did this,but they were unable to provide me with the receipt number.For some reason they wilfully misled me.I believe that they did this under instructions from MFS themselves....to reduce demand for the float.
As a consequence I have doubts about the integrity of MFS themselves...they are too successful to sell...but I will be watching them closely....maybe too smart by half this mob.I have been in the share game for fifteen years and no company has ever refused me a prospectus before...this mob did though.,after sending me the "valued shareholder letter"
scsl
11th-June-2006, 04:15 PM
Yeah it's fair enough to be upset with MFS. Though I'm probably not in a position to say because I have to admit, I'm still a newbie compared to everyone here...
The following are just some forecasted figures from HFA's summary income statement from their prospectus. ($ millions)
I'm also looking forward to MFS/HFA's next announments... I'm guessing that people are anticipating some really good news!
smoothsatin
29th-August-2006, 09:09 PM
I also got into MFS via breakfree, i think i bought breakfree at 1.8 then MFS gave 3 of theirs for 1 of Breakfrees, so has gone well so far. Have traded it several times since and bought more at 3.7 a month or so ago. Difficult to see downside with it, although quality of its assets that it spins off are sometimes questionable....eg i am not happy with retirement village activity, but all that matters in the short and medium term is that they flog them off....will continue to run for a couple of years yet i suspect....all aboard!
michael_selway
29th-August-2006, 10:23 PM
I also got into MFS via breakfree, i think i bought breakfree at 1.8 then MFS gave 3 of theirs for 1 of Breakfrees, so has gone well so far. Have traded it several times since and bought more at 3.7 a month or so ago. Difficult to see downside with it, although quality of its assets that it spins off are sometimes questionable....eg i am not happy with retirement village activity, but all that matters in the short and medium term is that they flog them off....will continue to run for a couple of years yet i suspect....all aboard!
yeah if they flog it off when the price is high, thats ok then, no risk if the assets crash
Long run, they may get a bad rep and find it difficult to sell assets to investors, but this is only an if, i am certainlt not condeming any of their spin offs, i even had MFT for a bit, but sold when they sold the gold coast property last year. Those estimates are very conservative btw, eps for 06 was 43 and div 26, with management predicted year on year eps growth going forward. granted you can go broke believing mangement forecasts, but these guys have always been conservative with estimates in the past. One of the few sizable stocks you can realistically see gaining 40 or more % in the next 12 months. What else are you looking at at the moment?
scsl
31st-August-2006, 10:28 PM
Long run, they may get a bad rep and find it difficult to sell assets to investors, but this is only an if, i am certainlt not condeming any of their spin offs, i even had MFT for a bit, but sold when they sold the gold coast property last year. Those estimates are very conservative btw, eps for 06 was 43 and div 26, with management predicted year on year eps growth going forward. granted you can go broke believing mangement forecasts, but these guys have always been conservative with estimates in the past. One of the few sizable stocks you can realistically see gaining 40 or more % in the next 12 months. What else are you looking at at the moment?
I don't think it's because of a bad reputation. Although they have access to a large number of financial planners and retail investors, MFS still doesn't have the reach and reputation of say MacBank. MFS has spun off several listed companies already, and with each one, management has learned a great deal and will improvise in the future.
MFS closed at $4.39 today. At this level, I think MFS is definately undervalued. I am confident that it can gain at least the 40% smoothsatin mentioned and wouldn't be surprised if it is up 50-60% this time next year. The past year has seen a huge re-rating in the sp and I believe that more is on the way as the market realises and appreciates its potential.
Despite a strong run up from about $3.70 (which has turned out to be a great buy!), I think the sp can keep rising strongly and I expect this very soon. A close above $4.50 would be bullish.
Prospector
1st-September-2006, 08:34 AM
This is not directly share related in the short term, but I heard a dreadful tale of customer service about Breakfree yesterday. A client had booked and paid flights and accommodation (with Breakfree) from Adelaide to Cairns a few months earlier, but was contacted the DAY before departure by Breakfree that "sorry, we have overbooked and you cant stay with here!" WHAT!
The people said we have paid for flights and we are coming and will sleep in your foyer! And threatened legal action, obviously. Eventually they were accommodated elsewhere! They heard later that they were bumped by owners wanting to stay in their own units.
We owned an apartment in the French Quarter at Noosa until last year. When Breakfree bought the Management rights after a few years of ownership, the whole place went from being a boutique 'one off' kind of place to being a Breakfree branded place. Most owners were furious! We hated the new management and sold as soon as we could!
We bought shares in BRK at about the same time, so we could have a bigger voice. I agree that this has been a good move profit wise, but as an investment based on corporate values - well ?????
scsl
3rd-September-2006, 08:03 PM
It is very hard to see MFS underperform in the next few years. MFS is now a billion dollar company and with strong growth potential, it is only a matter of time before it gains entry into the ASX 200. This will no doubt see industry heavyweights start to appear on MFS’s share register and at the same time, see the sp head north as they scramble to accumulate shares (institutions now hold 28% of shares).
I think that MFS continues to be undervalued by the market, relative to its competitors. (MFS plans to launch a $600 million tourism-focused investment trust. To be launched by the first quarter next year, this offloading of all of its property and tourism assets will see MFS become a pure financial services company. I believe this reiterates the fact that MFS should be valued according to the likes of MacBank, Babcock and Allco Finance Group) Looking at FY07 forecast earnings, MacBank is on a P/E ratio of 14.3, Babcock 18.0 and Allco 17.1. In comparison, MFS has a P/E of 13.7. Please note that this is based on earnings estimates. Having said that, MFS’s P/E of 13.7 is calculated from the median EPS estimate of 31.5 cents. However, MFS has had a history of underpromising and overdelivering** and so I believe that FY07 EPS will be at least 35-40 cents (FY08 forecast earnings is 39.2 cents). So say for example, MFS earns 35 cents per share. That would equate to a P/E of 12.3, which just represents great value.
**For example, where analysts estimated that FY06 NPAT would come in at about $50-55 million, MFS announced a figure of $97.4 million!
Also, MFS should command a higher P/E because it is estimated that it will have the highest growth rate. So at present, MFS’s valuation is very attractive.
In giving guidance for 2007, MFS talked about ‘future transactions and its deal pipeline’. Hence, MFS is still attracted to being involved in future acquisitions which are likely to be packaged with other assets into listed funds/companies. Domestically, MFS is looking in the sub $200 million space, thereby avoiding competition from the likes of MacBank and Babcock. This strategy has worked in the past and has produced healthier returns on investments than say, the multi-billion dollar deals that MacBank is regularly involved in.
To my surprise and delight, MFS is establishing an overseas funds management subsidiary. This displays that MFS has a lot of confidence in their expertise and experience.
Price targets, broker recommendations, great past performance aside, I genuinely believe that MFS will continue to be a fantastic short term and long term trade/investment. I am a strong believer of the MFS story and suggest that those looking for a great investment should do their research on this up-and-coming financial company.
Cheers,
scsl
smoothsatin
3rd-September-2006, 10:31 PM
It is very hard to see MFS underperform in the next few years. MFS is now a billion dollar company and with strong growth potential, it is only a matter of time before it gains entry into the ASX 200. This will no doubt see industry heavyweights start to appear on MFS’s share register and at the same time, see the sp head north as they scramble to accumulate shares (institutions now hold 28% of shares).
I think that MFS continues to be undervalued by the market, relative to its competitors. (MFS plans to launch a $600 million tourism-focused investment trust. To be launched by the first quarter next year, this offloading of all of its property and tourism assets will see MFS become a pure financial services company. I believe this reiterates the fact that MFS should be valued according to the likes of MacBank, Babcock and Allco Finance Group) Looking at FY07 forecast earnings, MacBank is on a P/E ratio of 14.3, Babcock 18.0 and Allco 17.1. In comparison, MFS has a P/E of 13.7. Please note that this is based on earnings estimates. Having said that, MFS’s P/E of 13.7 is calculated from the median EPS estimate of 31.5 cents. However, MFS has had a history of underpromising and overdelivering** and so I believe that FY07 EPS will be at least 35-40 cents (FY08 forecast earnings is 39.2 cents). So say for example, MFS earns 35 cents per share. That would equate to a P/E of 12.3, which just represents great value.
**For example, where analysts estimated that FY06 NPAT would come in at about $50-55 million, MFS announced a figure of $97.4 million!
Also, MFS should command a higher P/E because it is estimated that it will have the highest growth rate. So at present, MFS’s valuation is very attractive.
In giving guidance for 2007, MFS talked about ‘future transactions and its deal pipeline’. Hence, MFS is still attracted to being involved in future acquisitions which are likely to be packaged with other assets into listed funds/companies. Domestically, MFS is looking in the sub $200 million space, thereby avoiding competition from the likes of MacBank and Babcock. This strategy has worked in the past and has produced healthier returns on investments than say, the multi-billion dollar deals that MacBank is regularly involved in.
To my surprise and delight, MFS is establishing an overseas funds management subsidiary. This displays that MFS has a lot of confidence in their expertise and experience.
Price targets, broker recommendations, great past performance aside, I genuinely believe that MFS will continue to be a fantastic short term and long term trade/investment. I am a strong believer of the MFS story and suggest that those looking for a great investment should do their research on this up-and-coming financial company.
Cheers,
scsl
Not to dull your enthusiam, but i should clear a few things up for people reading your post, eps for 06 was 0.43, almost exactly in line with broker forecasts, also what are you basing your eps future estimates on? You probably need to differentiate between recurring income and profit from transaction income. Frankly, broker estimates for a company like MFS in 08, whose profit is far more sensitive to individual deals than mbl, bnb etc, are stabs in the dark at best.
Otherwise your diagnosis looks pretty good :)
michael_selway
3rd-September-2006, 11:12 PM
**For example, where analysts estimated that FY06 NPAT would come in at about $50-55 million, MFS announced a figure of $97.4 million!
Cheers,
scsl
Hi
did that include any one off sales?
thx
MS
Prospector
4th-September-2006, 10:11 AM
No wonder the Directors forgive S8 for their hostile takeover a few years ago (Today's Australian). MFS are now taking over S8 with S8's boards approval!
michael_selway
4th-September-2006, 10:14 AM
No wonder the Directors forgive S8 for their hostile takeover a few years ago (Today's Australian). MFS are now taking over S8 with S8's boards approval!
How high will MFS and SEL go up today?
thx
MS
Prospector
4th-September-2006, 10:28 AM
How high will MFS and SEL go up today?
thx
MS
Its quite bizarre - I was only thinking this morning, before the announcement that I might top up. Now, both shares are 'adjust' - whatever that means.
For S8 the offer values them at 30%+ premium to last traded price, so worth getting in on as the S8 Board have supported MFS offer. For MFS - not too sure really!
michael_selway
4th-September-2006, 11:05 AM
Its quite bizarre - I was only thinking this morning, before the announcement that I might top up. Now, both shares are 'adjust' - whatever that means.
For S8 the offer values them at 30%+ premium to last traded price, so worth getting in on as the S8 Board have supported MFS offer. For MFS - not too sure really!
MFS down on open, i wonder why
thx
MS
scsl
4th-September-2006, 12:49 PM
Hi
did that include any one off sales?
thx
MS
Yes, that $97.4 million figure does include profit on asset related transactions. I apologise for comparing it to the $50-55 million figure - this was the estimate on operating profit.
Not to dull your enthusiam, but i should clear a few things up for people reading your post, eps for 06 was 0.43, almost exactly in line with broker forecasts, also what are you basing your eps future estimates on? You probably need to differentiate between recurring income and profit from transaction income. Frankly, broker estimates for a company like MFS in 08, whose profit is far more sensitive to individual deals than mbl, bnb etc, are stabs in the dark at best.
Otherwise your diagnosis looks pretty good :)
I got my future EPS estimates from Commsec. The median EPS estimate of three featured brokers is currently 31.5 cents. However, say I had no access to these figures or any analyst reports, I am still able to have a 'guess' as to how MFS will perform in the coming year.
Management's guidance on FY2007 results has said that ordinary earnings (those that exclude profit from asset related transactions) should be at least 30 cents. I have based my estimate of 'at least 35-40 cents' on what I have continually seen in the past with MFS. I think they will continue to deliver more than what they've said. For example, I think MFS can achieve more than the $4 billion in assets under management (they are aiming for) which will ultimately mean more fees/income generated.
As for broker estimates for FY08, I haven't even mentioned anything of this sort. However like you said, I think it is still appropriate to differentiate between operating income and income generated from asset transactions.
From what we've seen today with the merger announcement, one thing's for sure - that these asset transactions won't be one-off, they will be ongoing!
Its quite bizarre - I was only thinking this morning, before the announcement that I might top up. Now, both shares are 'adjust' - whatever that means.
For S8 the offer values them at 30%+ premium to last traded price, so worth getting in on as the S8 Board have supported MFS offer. For MFS - not too sure really!
I think that at this level (about $4.10), MFS is very worth getting into. Not only was the (at one stage) 8% drop a good time to get in, I think it was an overreaction to the announcement. Perhaps the market believes that MFS is overvaluing S8 Ltd.
scsl
4th-September-2006, 01:43 PM
Having read the merger presentation, the following stuck out:
> Substantial synergies and strategic benefits will be realised.
> Through this merger, MFS will be able to extract significant value and EPS accretion from strategic initiatives that will arise.
> This will increase the size of the tourism-focused investment trust that will be listed soon. The "acquisition program [is] not yet declared to be complete". :D
> This merger of two strong competitors (under the MFS name) will bring MFS even more investors - a great opportunity to cross-sell its many products.
> MFS will be able to grow its financial services initiatives. e.g. financing people's holidays, international money transfers, providing insurance etc will be provided in this differentiated travel model.
Hmmm, I wonder if MacBank or any other large investment banks are scrambling a team together to work on a bid...
Prospector
4th-September-2006, 02:15 PM
Well, I think they have over valued S8. Maybe the market does too!
smoothsatin
4th-September-2006, 04:19 PM
No doubt there will be further price weakness for awhile. Same happened when MFS took over BRK, SEL sellers keep the downward momentum for some time, i think last time for several months from $1.8 to $1.2, but several factors suggest they wont decrease by the same proportion this time, e.g MFS is larger and easier to value. I don't like watching them go down, but reality is MFS is now more valuable, but selling for less than it was last week.
smoothsatin
4th-September-2006, 07:53 PM
2 x change of directors notice, it must be to signal confidence to the market whose initial reaction was poor, they seriously wouldnt need to increase their respective holding by 0.5%!
michael_selway
4th-September-2006, 08:11 PM
2 x change of directors notice, it must be to signal confidence to the market whose initial reaction was poor, they seriously wouldnt need to increase their respective holding by 0.5%!
wow they bought alot
thx
MS
dubiousinfo
5th-September-2006, 10:31 AM
MFS currently trading at $4.14
If you buy SEL at $ 4.43 after takeover & cash of 70c + spec div 15c the entry point is $ 3.58
Plus leaves you exposed to any higher bids (though this seems unlikely)
The risk would be if the take over failed the SP of SEL is going to tank.
michael_selway
5th-September-2006, 07:31 PM
MFS currently trading at $4.14
If you buy SEL at $ 4.43 after takeover & cash of 70c + spec div 15c the entry point is $ 3.58
Plus leaves you exposed to any higher bids (though this seems unlikely)
The risk would be if the take over failed the SP of SEL is going to tank.
SEL keeps tanking, why is that?
Date: 5/9/2006
Author: Anthony Klan
Source: The Australian --- Page: 23
Queensland investment group MFS launched a $A700m takeover bid for S8 on 4 September 2006. At around $A5 a share, the off-market bid was almost 40 per cent above S8's previous close. However, the deal may be blocked by the Australian Competition & Consumer Commission, as it would give MFS control of 13,000 holiday units - about 20 per cent of the management rights sector. S8 has been the subject of investigations into its domestic travel agency business after claims that it charged overly high commissions
SEL - Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 12.6 20.2 30.5 38.5
DPS 7.5 10.0 14.2 17.9
MFS MFS LIMITED Overnight Price: $3.87
ABN Amro rates the stock as Buy - Initiation of Coverage - The broker sees the stock as having significant growth potential, with success in the S8 (SEL) merger proposal likely to see assets under management increase from around $3bn to $5bn.
It estimates the S8 proposal would add 4% to earnings in FY07, with other attractions of the story being the growing annuity stream and the minimal capex and capital requirements.
Without including S8 in its calculations the broker values MFS at $5.15.
Sector: Diversified Financials.
Target price is $5.15 Current Price is $3.87 Difference:$1.28 - (brackets indicate current price is over target). If MFS meets the ABN Amro target it will return approximately 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).
------------------
Macquarie 25-Aug-06 1 Outperform $5.43 40.3%
The broker has raised its target on the stock by 23c to $5.43 following the result.
The stock is one of the broker’s best small cap picks.
------------------
UBS 24-Aug-06 1 Buy 2 $5.21 34.6%
Following the Outrigger acquisition, the analysts are increasing confident in the stock, and have increased their target by 16c to $5.21.
Deal pipeline seen as healthy.
SEL S8 LIMITED Overnight Price: $4.30
ABN Amro rates the stock as Buy - The broker has retained its rating following the merger proposal as it suggests S8 offers an attractive entry into MFS (MFS).
Additionally the broker notes the company''s profit result of $20.9m was slightly better than guidance, while management indicated earnings in FY07 and FY08 were likely to be $44m and $60m respectively.
Valuation is $6.18.
Sector: Real Estate.
Target price is $5.00 Current Price is $4.30 Difference:$0.70 - (brackets indicate current price is over target). If SEL meets the ABN Amro target it will return approximately 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Credit Suisse rates the stock as Outperform - The analysts see the discussed union with MFS as offering potentially significant benefits, but they need to find out more about the details.
Sector: Real Estate.
Target price is $4.75 Current Price is $4.30 Difference:$0.45 - (brackets indicate current price is over target). If SEL meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
SB Citigroup rates the stock as Downgrade to Hold from Buy, High Risk - Target $4.71 (was $4.95). The broker notes the profit result was a strong one but has been overshadowed by the merger deal with MFS (MFS).
In the broker''s view the deal is likely to succeed and should offer a number of chances for cost savings and economies of scale.
Valuation is $5.50.
Sector: Real Estate.
Target price is $4.71 Current Price is $4.30 Difference:$0.41 - (brackets indicate current price is over target). If SEL meets the SB Citigroup target it will return approximately 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
scsl
5th-September-2006, 09:06 PM
Thanks for posting that up MS. I've been a strong supporter of MFS since its merger with Breakfree and I have barely read any research reports on them - it's all been my own research. So, it's really great to see the large brokers put such positive valuations/targets on MFS. I definately think these were calculated by using the multiples that are seen (and will be seen in the future) in MacBank, Babcock and Allco Finance.
It's also ironic that MacBank has the most positive target on MFS, seeing as MFS will one day be a more competitive rival.
Also, it's interesting to read that ABN Amro "suggests S8 offers an attractive entry into MFS". Depending on how the S8 sp performs, this may be true.
dubiousinfo
5th-September-2006, 09:28 PM
Providing the deal goes through, buying S8 at its current price of $4.15 gives you an entry to MFS of $3.30.
Think I will get me some of that.
scsl
5th-September-2006, 10:07 PM
Providing the deal goes through, buying S8 at its current price of $4.15 gives you an entry to MFS of $3.30.
Think I will get me some of that.
So just to clarify things, are you saying that by buying S8 at $4.15, you are effectively buying MFS at $3.30?
Oh and is this for both offers that MFS is offering? (As in the one MFS share and $A0.70 in cash or 1.15 MFS shares for one S8 share)
Thanks,
scsl
smoothsatin
5th-September-2006, 10:17 PM
Entry point with sel at $4.15 is 3.50 per mfs. 1 share +70 cents + 15 cents div - not getting 20 cent mfs div (ignoring franking credits).
Note the $4.25 minimum SEL price required for the thing to go ahead. The price will go above again when all the shareholders who dont want mfs shares have sold their holdings.
In terms of ACCC, i believe they are supposed to intervene when a merger/acquisition will have a material effect on market outcomes in markets of national or international importance. IT seems this fails on both fronts? I could be wrong.....
BUY BUY BUY!!!!!!!!!
smoothsatin
6th-September-2006, 08:34 PM
Where to from here, SEL and MFS just closed at the same price....will MFS start buying SEL on market to help support the price? Ot is this temporary and the SEL sellers will be weeded out and prices return to closer to where they were? I am happy with either...
Ken
22nd-September-2006, 12:46 AM
will this merger go ahead?
smoothsatin
22nd-September-2006, 09:54 PM
I expect it will, both sets of management know it is the best way forward, so it is a formality to go through in one form or another. If you can take a bit of volatility in the mean time it is a good time to buy in. Once all of the SEL holders who don't want a bar of MFS are out (e.g PPT), the SP will float upwards. In 12 months MFS will be at $6+ (providing a soft landing as oppossed to a crash/recession for US and AUST) and we will be better off for the whole experience.
scsl
23rd-September-2006, 02:11 AM
Ken, I think the merger will almost definately go ahead.
Seeing as the merger has been given the go ahead by the ACCC, it will only be a matter of time before the merger gains momentum.
After this, don't be surprised to see MFS continue acquiring other assets for its vehicles and trusts - very much in Macquarie Bank style.
MFS is a great buy at under $4. I think if the merger was not announced, the MFS sp would be above $5 by now. Concerns about whether MFS is taking a gamble that S8 had adequately integrated and consolidated the four travel companies it had bought in less than a year and the size of the merger is what's keeping the sp down.
pacer
23rd-September-2006, 02:37 AM
Try this one...SLA...was a travel compny that started up post 9/11.....then diverted the $$$$ into other resourses...neva eva play with planes.....SLA learnt THIER LESSON...nice little earner here if you can get in cheap 17-18c the company diverted to a natural therapy compny....stole a ripper of the USSR government....possiby ....a smal pearl.....management are over qualified to be running a small play like this...there must be something in it..
Prospector
10th-October-2006, 08:48 AM
Lovely little dividend cheque the other day - 20cents a share fully franked! At the current share price, MFS really is very sweet!
smoothsatin
10th-October-2006, 09:01 PM
Agreed P, at this rate t wont be long until the divs are = to what i paid for my shares!
michael_selway
11th-October-2006, 12:31 AM
Lovely little dividend cheque the other day - 20cents a share fully franked! At the current share price, MFS really is very sweet!
hehe you dont have Direct Credit? ;)
thx
MS
scsl
11th-October-2006, 12:56 AM
hehe you dont have Direct Credit? ;)
thx
MS
That's the thing... I knew about the dividend but was not expecting it to arrive in the mail (It was a great way to start off the week though!). This is because I normally have it reinvested as part of MFS's reinvestment plan.
The way MFS has been going, I'd much prefer if the DRP was still in place.
I'm not sure why it was not in place for this 20 cent final dividend. smoothsatin, there was no DRP option for this particular dividend right? ...just (very) curious!
Prospector, isn't it fully franked at 30%?
Prospector
11th-October-2006, 09:02 PM
Yup, fully franked.
Oh, and it was direct deposited too, it just doesn't sound as sexy as a cheque in the mail :p:
As long as they get away their tourism assets (it seems s8 will go through now) at a reasonable price and achieve AUM targets on top of them as predicted, eps will probably be around 50 for fy07, you would imagine $6 is a real possibilty/probability. It's hard picking the actual prce because it needn't reflect the comany's value........indeed it probably doesn't reflect that now. However against all that, the company doesn't have the greatest transparency which would put many investors off.
Other upward drivers of a non business nature include new top 200 entry, further broker coverage and margin lenders allowing borrowing aginst/for MFS shares.
Ken
13th-October-2006, 08:37 AM
Once the merger takes place do my SEL shares turn into MFS shares? I bought 1500 SEL shares at 4.20
What is going to happen if MFS are $4.50 and SEL are still $4.75?
Do my SEL shares convert to MFS shares, if so how many will i get?
Or do they just pay me out?
Nudibranch
15th-October-2006, 08:49 PM
From the MFS LIMITED and S8 LIMITED JOINT ASX & MEDIA RELEASE - 4 September 2006:
"...
MFS Limited (ASX:MFS) to offer S8 Limited (ASX:SEL) shareholders 1 MFS share plus 70 cents cash for each S8 share or alternatively 1.15 MFS shares for each S8 share ('Offer'). This values S8 at approximately $700 million. S8 shareholders will also be intitled to recieve a further special cash dividend of 15 cents per ordinary share upon the takeover becoming unconditional. The Offer will extend to new shares issued by S8 upon the exercise of S8 options and upon the conversion of S8 convertible notes.
..."
And further on in the document:
"...
MFS intends to despatch a Bidders Statement to S8 shareholders and unitholders within five weeks. S8 intends to send its Target Statement to their shareholders at the same time.
..."
So, Ken, to answer your questions:
1) Once the merger takes place, your SEL shares will "turn in to" MFS shares and you may be granted a special dividend.
2) At the close of Friday's prices - (MFS=$4.40; SEL=$4.70), and assuming that you elect to receive 1 MFS share for each of your SEL shares, and a further 70 cents, your holding will then be worth $7650. (That is an 8% premium on its current value of $7050).
(1500*$4.40)+(1500*$0.70)=$7650
Please note that I have not included the potential "15 cents per ordinary share upon the takeover becoming unconditional" as outlined in the aforementioned media release.
scsl
16th-November-2006, 02:36 AM
MFS's AGM is this morning... I'm looking forward to it - my first AGM. Don't know what to expect, but I just hope it's not boring as say, some of my uni lectures have been!
Hopefully there'll be more information about the announcements that came out in the past three days re: the Sunleisure investment, stake taken in Vantage Asset Management and a joint venture in Dubai.
Btw, if you're not a shareholder in a company, are you still able to attend their AGM? (I hold MFS but) wouldn't mind going along to other companies' AGMs.
scsl
16th-November-2006, 03:21 PM
The AGM went for about 45 minutes and went smoothly. Though I was surprised that there were no questions asked. Even the analysts/media present did not have any rejections or questions.
We were told by MD Philip Adams that the ACCC will not be intervening with their acquisition of S8. I wouldn't say that the chairman and MD were very very upbeat about the progress and they were keen to stress that the success of it is not whether they end up acquiring S8, but whether they acquire S8 on their terms. I don't know what to read of this, but I'm still confident it will proceed.
Also, there was quite a lot of mention about MFS's investment banking division. For example, the chairman spoke of MFS wanting to become a 'force in investment banking' and the potential they see in the coming years for this division. Sounds good to me!
michael_selway
16th-November-2006, 08:03 PM
The AGM went for about 45 minutes and went smoothly. Though I was surprised that there were no questions asked. Even the analysts/media present did not have any rejections or questions.
We were told by MD Philip Adams that the ACCC will not be intervening with their acquisition of S8. I wouldn't say that the chairman and MD were very very upbeat about the progress and they were keen to stress that the success of it is not whether they end up acquiring S8, but whether they acquire S8 on their terms. I don't know what to read of this, but I'm still confident it will proceed.
Also, there was quite a lot of mention about MFS's investment banking division. For example, the chairman spoke of MFS wanting to become a 'force in investment banking' and the potential they see in the coming years for this division. Sounds good to me!
Good stuff!
scsl
29th-November-2006, 12:47 AM
News out today that MFS would be increasing a part of the offer for S8 seems not to have pleased investors. MFS ended the day down nearly 4%. This increase in consideration is only for S8 convertible notes and not S8 ordinary shares and options.
Yesterday, MFS announced that it had extended its offers for the ordinary shares and options until 11 December 2006. As of 27 November, MFS had 48% of S8 shares and 15% of S8 options.
Perhaps this takeover bid is not going as well as MFS had planned. However, this move to extend the offer without increasing it (except for the convertible notes) shows discipline from management, who will want to complete this acquisition on their terms. Though I think that MFS has the capability to increase the offer for S8 shares and options if the occasion arises.
Is there still any of you that are buying S8 shares for a quick profit? Do you think it is still worth it?
michael_selway
29th-November-2006, 08:52 AM
News out today that MFS would be increasing a part of the offer for S8 seems not to have pleased investors. MFS ended the day down nearly 4%. This increase in consideration is only for S8 convertible notes and not S8 ordinary shares and options.
Yesterday, MFS announced that it had extended its offers for the ordinary shares and options until 11 December 2006. As of 27 November, MFS had 48% of S8 shares and 15% of S8 options.
Perhaps this takeover bid is not going as well as MFS had planned. However, this move to extend the offer without increasing it (except for the convertible notes) shows discipline from management, who will want to complete this acquisition on their terms. Though I think that MFS has the capability to increase the offer for S8 shares and options if the occasion arises.
Is there still any of you that are buying S8 shares for a quick profit? Do you think it is still worth it?
Do you reckon MFS is a good LT hold?
thx
MS
scsl
29th-November-2006, 12:45 PM
Do you reckon MFS is a good LT hold?
thx
MS
Absolutely. I think many investors don't realise the potential MFS has. MFS 'aims to be an international leader in identifying and extracting value from strategic opportunities in the investment banking, financial services and funds management sectors.' (that's from their latest annual report) IMO, MFS is already one of the leaders of that right here in Australia. MFS sees its core business as 'the creation, ongoing management, growth and development of a diverse range of investment trusts and other vehicles for investors.' (Thus, there is basis to the media calling MFS the next MacBank/Babcock.) If you have a look at the annual report, you will see that MFS has been excelling at this and there's no reason for this stop.
Management are confident in their abilities also, with successful diversification of the business into new industry sectors and segments. I don't see this as trying to grow the company for the sake of it. After all, founders Philip Adams (MD) and Michael King (CEO) both have very significant stakes in the company's shares.
If I was an investor that didn't have MFS shares, I'd be buying a lot. If I was already an investor, I'd be accumulating shares as well as CFDs. (I'm doing both of the latter.) I hope I don't come across as trying to ramp up this stock, but I am a very big believer in MFS.
__ __ __
MFS now has more than 53% of S8 shares.
scsl
5th-December-2006, 11:45 PM
The takeover of S8 is as good as complete now, with an important (and most likely, final) hurdle cleared today. Challenger Financial Services indicated today that it will accept into the increased S8 convertible note offer.
Before today, the entire takeover was uncertain because of Challenger's refusal to accept MFS's convertible notes offer - Challenger holds 50.1% of the S8 convertible notes on issue.
With a big obstacle now cleared, the takeover should proceed as planned. Today's sign of confidence and support by Challenger will see the remaining unaccepted MFS offers for S8 shares, options and convertible notes start to stream in.
Do note that this is an excellent outcome for MFS shareholders not just because the takeover can now be completed, but also that the total transaction cost in this offer remains unchanged from the day they announced it. Because Mr Chris Scott (S8 major shareholder and MD) has waived his own cash and MFS shares entitlement which were worth over $22 million ( :eek: that's respect right there!!) so that the revised convertible notes offer could be made. I think this is even better news than Challenger accepting the offer because, it shows that Mr Scott (who will stay on with MFS after the takeover is complete) has put S8 share, option and convertible note holders ahead of himself, demonstrating his 'unequivocal view that the MFS deal is the right deal for S8 and that a future together as one larger integrated group has, in his view, significant upside'.
scsl
13th-December-2006, 04:12 AM
MFS will now move to compulsorily acquire all outstanding S8 shares, options and convertible notes as it has achieved more than 90% acceptance for the takeover.
With the takeover successful and assured, the next few months will be critical. Not only will they have to smoothly integrate the S8 travel products distribution network, but management will be consolidating this (along with its existing leisure and accomodation businesses) into the one investment vehicle - to be floated in the current financial year. Should be huge! :D More fees!! Yes pleeease!
I'm now looking forward to the next guidance announcement to the market - should be soon.
scsl
19th-December-2006, 11:24 PM
The revised guidance was released to the ASX today, along with an operational update and information of an institutional placement. I strongly recommend potential investors (and of course, current shareholders) to read this. It's upbeat and very informative. Keeping in mind that management continue to underpromise and overachieve, it's kind of freaky what MFS is going to achieve and deliver in both the near term and over the next few years.
MFS was in trading halt today, pending the release of the above announcements. The bookbuild for the placement happened this afternoon and shares recommence trading tomorrow morning.
michael_selway
19th-December-2006, 11:33 PM
The revised guidance was released to the ASX today, along with an operational update and information of an institutional placement. I strongly recommend potential investors (and of course, current shareholders) to read this. It's upbeat and very informative. Keeping in mind that management continue to underpromise and overachieve, it's kind of freaky what MFS is going to achieve and deliver in both the near term and over the next few years.
MFS was in trading halt today, pending the release of the above announcements. The bookbuild for the placement happened this afternoon and shares recommence trading tomorrow morning.
I'm turning into an MFS fan as of today. Why? Because I actually had a look at them today, and hey, this looks like a great stock! The next B&B perhaps.
Might be early enought to get on the bandwagon, but it's had an awesome run. Has just broken out of some consolidation, so maybe a good time to get on.
It is one of my favourites too; have held since before it was BRK. Just seems to keep on keeping on, upward :D
scsl
21st-December-2006, 10:18 PM
I'm turning into an MFS fan as of today. Why? Because I actually had a look at them today, and hey, this looks like a great stock! The next B&B perhaps.
Might be early enought to get on the bandwagon, but it's had an awesome run. Has just broken out of some consolidation, so maybe a good time to get on.
(not holding yet)
Welcome to this thread kennas! Isn't great to have a moderator that's so upbeat about this stock! :D I still continue to think that MFS is undervalued, hence my continuing to accumulate shares. The announcement on 19/12 (which I spoke about in post #60) didn't disappoint and further displayed the many things that will happen in the future as well as management's confidence, professionalism and upfront nature.
It's a great time to be jumping aboard - I'm driving! ...oh wait, MFS MD Philip Adams is. ;) The S8 takeover has been completed successfully, EPS guidance has be revised up to 35 cps (still quite conservative IMHO) not to mention transactional and other one off income which both are becoming an important part of company earnings, the institutional placement being successful amidst significant demand from existing and new institutions – this provides MFS with “further financial flexibility”. Also, MFS’s journey into Asia via Dubai is a great start in terms of international expansion plans.
And I really appreciate you sharing the info from the broker reports. May I ask where you compiled it from?
It is one of my favourites too; have held since before it was BRK. Just seems to keep on keeping on, upward :D
It's definately my number 1! It wasn't long ago that MFS took over BRK (Breakfree), which left me very happy and with a pile of new stock, of which I had never heard of. But I was close to selling out (around April 2005) because of the steady decline in sp following uncertainty of transition and integration. Luckily I held out, otherwise there would have been a lot of :banghead:.
michael_selway
28th-December-2006, 12:09 AM
It is one of my favourites too; have held since before it was BRK. Just seems to keep on keeping on, upward :D
EPS(c) PE Growth
Year Ending 30-06-07 33.2 14.2 -22.0%
Year Ending 30-06-08 40.4 11.6 21.7%
thx
MS
kennas
28th-December-2006, 10:13 AM
MFS will be the next BNB imo ;)
MS
I've heard that somewhere else too Michael, in a broker review. Big claim, but on the cards. Do they have the same business model as BnB and Maquarie? I'd expect so, if brokers are stating that. I haven't bought any yet, are you holding?
scsl
9th-January-2007, 02:15 PM
Has had a great start to the year - it's now up 8% on it's opening 2007 price of $4.61. Having broken out on Dec 13, it then looked to be heading back towards the trading range that it had spent 7 months of 2006 in. Then while the ASX200 has reversed strongly in '07 so far, MFS went the other way, supported by increasing volume. Now here's one stock to follow in '07! :)
scsl
11th-January-2007, 06:05 PM
The volume of shares traded lately has been impressive. Trading in '07 so far (8 days inc. today) has seen volumes of at least 2 million shares each day. This is very significant because in the whole of calendar year '06, there were only 9 days where 2 million or more shares changed hands (the 5.7 million traded today was the second highest ever). And it's not as though the high volume is taking the sp down or keeping it steady - it's being taken to record highs. This shows that MFS is fast becoming a better known company (not just as a stock but as an investment and funds management company) and that institutional investors/traders are becoming more active.
michael_selway
13th-January-2007, 01:20 AM
The volume of shares traded lately has been impressive. Trading in '07 so far (8 days inc. today) has seen volumes of at least 2 million shares each day. This is very significant because in the whole of calendar year '06, there were only 9 days where 2 million or more shares changed hands (the 5.7 million traded today was the second highest ever). And it's not as though the high volume is taking the sp down or keeping it steady - it's being taken to record highs. This shows that MFS is fast becoming a better known company (not just as a stock but as an investment and funds management company) and that institutional investors/traders are becoming more active.
Volume is still great. However, in the near term, MFS is looking overbought, with the RSI at 78.
kennas, if you're still following this thread, would you be able to do some tech/a on MFS (in particular, MACD)? For example, is MACD a helpful indicator with this stock? I have little knowledge of MACD, but it looks like MFS could reverse a little once the blue line crosses down over the red line (looking at BigCharts). Also, what does divergence indicate?
Thanks,
scsl
dubiousinfo
20th-January-2007, 08:16 PM
Half year results are due out on 15 Feb. Could be a good chance of surprising on the upside & this may keep the SP up. May be a short term drop if only in line with forecasts. (Buy the rumour sell the fact)
I hold.
scsl
24th-January-2007, 03:45 PM
Well, MFS has surprised me and raced up 9% since my post on Saturday. In the three days of trading since, it's been bought up on strong volume. This capitalises MFS at a solid $2.3 billion - two years ago it was $196 million!
I had closed my CFD position last week thinking that the sp had had a very good rise from around $4 since the end of November, only to see it continue after 5 days of 'consolidating' at just below $5.20! (I still hold all my non-CFD shares)
I'm looking forward to the half yearly due in mid Feb, in particular news of the S8 integration. However, I think that the institutional investors are very confident that this important step of the acquisition is going to plan - as evidenced by the volume.
The last time MFS issued a large number of shares (relative to previous shares issued), was after the Breakfree acquisition. In the two months after, the shares slid to $1.20 on EPS dilution and integration concerns. That's why this time round, I'm extremely happy with how the sp has reacted to this large acquisition. Initially I was contemplating on delaying plans to accumulate MFS shares mainly due to the dilution of EPS (I'm confident that the S8 integration will go smoothly because of great management and the retaining of key S8 personnel). However, the upbeat earnings guidance and outlook and the holding up of the sp led me to instead accumulate since November.
For management to compensate for the dilution of EPS shows that growth at MFS is far from abating. Sounds cheesy, but MFS has an exciting year (and future) ahead! For those that don't hold, it doesn't hurt to do some research on this little beauuuty! :D
michael_selway
26th-January-2007, 03:00 AM
Half year results are due out on 15 Feb. Could be a good chance of surprising on the upside & this may keep the SP up. May be a short term drop if only in line with forecasts. (Buy the rumour sell the fact)
I hold.
its going up atm!
thx
MS
scsl
27th-January-2007, 02:17 AM
its going up atm!
Another great day on Thursday - up 16 cents on very heavy volume (I wouldn't be surprised if there were institutional investors accumulating). This capped off a fantastic week for MFS, in which it rose every day, for a 4-day gain of 61 cents or 12%.
I found this article on FN Arena. Just what we need more of - coverage of a very rewarding and well-run stock! :D
Further Upside For MFS
FN ARENA NEWS - 17/01/2007
Shares in diversified financial services company MFS (MFS) have risen solidly following the company's successful takeover of travel group S8, but the warrants team at ABN Amro sees further upside as likely.
While the broker's fundamental experts have retained their $6.00 price target in the medium-term, the Warrants team believes investors should take advantage of any price weakness to lift exposure to the group. The team expects the S8 takeover to prove earnings accretive in the short-term, while group earnings will be further boosted by the recent acquisitions of Saville, Sunleisure and Sunkids, among others.
The broker estimates earnings growth in FY07 will be in the range of 30-40%, supporting its expectation the group's price to earnings (P/E) ratio will fall from 13.7x in FY07 to around 10x in FY09. This leaves the stock attractively priced compared to the likes of Macquarie Bank (MBL) on 15.5x and Babcock & Brown (BNB) at 17x, without even factoring in the forecast dividend yield of 6.14%.
Additionally, the team notes the stock looks good in terms of technical indicators having recently broken through resistance at $4.60, with the trend suggesting further share price gains. When combined with the expectation of further deal flow over the course of 2007, there remains scope for further upside, the team argues.
Others covering the stock are equally positive, with the FNArena database showing three Buy ratings on the company and an average share price target of $5.63. Shares in MFS today are stronger, as at 12.35pm the stock was up 6c at $5.18.
Also, holders of this stock will be happy to hear that MFS is one of the 'Red Hot Stocks' of 2007, as given in the latest Smart Investor magazine:
MFS is a diversified financial group which will have more than $5 billion in assets under management by mid-2007. We believe it's set for further growth due to its merger with S8, its strong growth in assets under management and its leverage to Australia's mandated superannuation growth. It has close relationships with strategic players, including Babcock & Brown, and it also has attractive fundamentals. We expect further deal flow in 2007.
I just love it how MFS is gradually making investment banking a solid part of its business. Mmmmm... all those feeees!
scsl
10th-February-2007, 05:06 PM
MFS has found support at $5.50, on daily volume of above 1-2 million, which is quickly becoming the norm - before this year, volume of above 2 million was a rare occurance.
The half-year report will be announced before the market opens on 19 February (next Monday). Will MFS move up or down from here? IMO, MFS will continue to beat investors/anaylsts' estimates. Although the sp has run pretty hard from $4 in a little over two months, I belive the seven months of consolidation in 2006 has set MFS up for another good run, providing management delivers and gives upbeat commentary. Having said that, we could see $6 before the end of February if results are very good.
michael_selway
11th-February-2007, 12:56 AM
MFS has found support at $5.50, on daily volume of above 1-2 million, which is quickly becoming the norm - before this year, volume of above 2 million was a rare occurance.
The half-year report will be announced before the market opens on 19 February (next Monday). Will MFS move up or down from here? IMO, MFS will continue to beat investors/anaylsts' estimates. Although the sp has run pretty hard from $4 in a little over two months, I belive the seven months of consolidation in 2006 has set MFS up for another good run, providing management delivers and gives upbeat commentary. Having said that, we could see $6 before the end of February if results are very good.
Yeah its not bad
thx
MS
scsl
20th-February-2007, 11:14 PM
MFS's record surge
20Feb07
GOLD Coast funds management giant MFS has closed out a year in which it displayed an insatiable appetite for acquisitions with a record first-half profit of $33.34 million.
As if to say its Australian acquisitions were reaching saturation, the result was unveiled against the backdrop of managing director Phil Adams relocating to the United Arab Emirates where MFS has teamed up with the Sunland Group to explore new funds-management ventures.
The MFS profit result for the six months to December 31 is up 32 per cent from $25.23 million a year earlier and includes only about 20 days' contribution of about $1.8 million from travel group S8.
The profit surge was delivered on a mere 8 per cent lift in revenue to $162.8 million.
The group also announced that former Federal Liberal Party leader Andrew Peacock would replace Terry O'Dwyer as chairman next month.
It was a year of significant growth for the company which now boasts net assets of more than $1.1 billion.
Assets under management have surged from $2.2 billion a year ago to $4.25 billion, and the company still expects this to rise to $5 billion by the end of this financial year.
MFS has calculated its net tangible asset backing at $2.62 a share, up from a negative 0.01c in the 2005 December half.
The company's shares, which were suspended from trading yesterday pending a $466 million capital raising, last traded at $5.80.
MFS is seeking to raise $256 million via a rights issue, offering one MFS share for every 8.25 shares owned at an issue price of $5.10 a share.
It is also seeking to raise up to $210 million from a hybrid note-warrant issue of up to 2.1 million securities, with each note attached to 14 warrants.
MFS intends using the extra funds to arm itself for upcoming acquisitions in Australia and New Zealand, as well as the non-debt-funded component of its Sunleisure and Sunkids purchase from the Sunland Group.
The company is paying an interim franked dividend of 7.5c a share, up from 6c previously.
This is despite a near doubling of shares on issue from 230 million to 414 million. MFS said it was on track to exceed the 2006 full-year payout of 26c a share.
In December, the company revised its profit forecast upwards by 13 per cent to at least 35c a share.
Mr Adams yesterday said the interim profit result was particularly pleasing in light of the exclusion of figures from its Mt Hotham and Falls Creek ski operations, which have since been rolled into the MFS Tourism and Leisure subsidiary.
There is also a reduced input from its Hedge Funds Australia operation, in which MFS now has just a 39 per cent stake.
MFS is expecting continued growth in the year ahead, forecasting earnings a share to rise by 30 per cent in 2008.
MFS had a series of takeovers last year, including $700 million for the Surfers Paradise-based S8, Australia's largest travel group, the $700 million purchase of housing group Villa World, the $114 million buyout of Stockland's Saville hotel management business and the $91 million deal for Sunland's Sunkids and Sunleisure arms.http://www.gcbulletin.com.au/article/2007/02/20/3372_business.html
scsl
20th-February-2007, 11:21 PM
I think what is remarkable is that despite there being a substantial increase in the number of shares (largely due to shares issued in the S8 takeover), management has still been able to increase the dividend by 25% from the previous corresponding period and EPS by 18%! WOW!!
With regards to guidance, 35cps for the full financial year has again been affirmed by the company. What’s more, ‘MFS seeks to exceed this guidance by a series of transactions and actions that are presently underway which will be enhanced by this raising. In the 2008 Financial Year, MFS will be seeking Earnings Per Share growth of at least 30%.’ Also, the half year profit ‘includes no material transactional or investment banking style revenue which is expected to be substantial in the 2nd Half.’
MFS will be raising up to $466 million to fund previously announced acquisitions (including Sunleisure and Outrigger), repay debt and/or fund future acquisitions, in which all three executive directors will be participating in full. MFS is not expanding too fast IMO, instead, this expanded capital base will allow it to fund investment opportunities as they come up. Keep in mind that MFS’s strategy is to look for opportunities that arise in the sub $200-300 million value category i.e. deals where MacBank and Babcock have no interest in.
The resignation of MD Phil Adams, who will move to reside full time in the United Arab Emirates, should in no way be seen as a negative – it can only be seen as being a great move. Mr. Adams, a founder together with CEO Michael King, still holds a significant stake in MFS, which means it’s in his best interests to see that expansion in the UAE is on the right track. He will have ‘complete executive responsibility for the management’ of MFS’s expansion in that region. In being one of the first movers in the UAE, I have no doubt that Adams will use this advantage to gain traction in funds management opportunities, amongst other things.
In case you’re wondering, the quotations are from the media announcement release on Feb 19. MFS resumes trading this Friday 23rd.
michael_selway
20th-February-2007, 11:28 PM
I think what is remarkable is that despite there being a substantial increase in the number of shares (largely due to shares issued in the S8 takeover), management has still been able to increase the dividend by 25% from the previous corresponding period and EPS by 18%! WOW!!
With regards to guidance, 35cps for the full financial year has again been affirmed by the company. What’s more, ‘MFS seeks to exceed this guidance by a series of transactions and actions that are presently underway which will be enhanced by this raising. In the 2008 Financial Year, MFS will be seeking Earnings Per Share growth of at least 30%.’ Also, the half year profit ‘includes no material transactional or investment banking style revenue which is expected to be substantial in the 2nd Half.’
MFS will be raising up to $466 million to fund previously announced acquisitions (including Sunleisure and Outrigger), repay debt and/or fund future acquisitions, in which all three executive directors will be participating in full. MFS is not expanding too fast IMO, instead, this expanded capital base will allow it to fund investment opportunities as they come up. Keep in mind that MFS’s strategy is to look for opportunities that arise in the sub $200-300 million value category i.e. deals where MacBank and Babcock have no interest in.
The resignation of MD Phil Adams, who will move to reside full time in the United Arab Emirates, should in no way be seen as a negative – it can only be seen as being a great move. Mr. Adams, a founder together with CEO Michael King, still holds a significant stake in MFS, which means it’s in his best interests to see that expansion in the UAE is on the right track. He will have ‘complete executive responsibility for the management’ of MFS’s expansion in that region. In being one of the first movers in the UAE, I have no doubt that Adams will use this advantage to gain traction in funds management opportunities, amongst other things.
In case you’re wondering, the quotations are from the media announcement release on Feb 19. MFS resumes trading this Friday 23rd.
EPS(c) PE Growth
Year Ending 30-06-07 33.8 17.2 -20.6%
Year Ending 30-06-08 42.3 13.7 25.2%
thx
MS
kennas
21st-February-2007, 09:36 AM
MFS in a trading halt... :confused:
Still going great on the chart after breaking through $4.50, but might be due for another breather. Finding $5.80 a bit tough to really crack. Under $5.50 next support down at $4.50 really. Drawing way away from the 200 d ma....
Might all depend on what the news is.
scsl
21st-February-2007, 10:36 AM
MFS in a trading halt... :confused:
Still going great on the chart after breaking through $4.50, but might be due for another breather. Finding $5.80 a bit tough to really crack. Under $5.50 next support down at $4.50 really. Drawing way away from the 200 d ma....
Might all depend on what the news is.
MFS is using this trading halt to bookbuild the entitlement offer as well as an opportunity for management to run a roadshow.
robert toms
5th-March-2007, 02:02 PM
This one taking a big hit today.An article in the AFR confirmed what they wrote in the risks sections of their entitlement prospectus.
They are awaiting a court ruling from the Fair Trading department in QLD....relating to accusations of overcharging by S8 in their apartment letting operations.As MFS bought S8 they are now liable for any adverse findings,refunds or penalties which may result.
I have got no doubt that MFS can pay these but the adverse perceptions that may ensue are harder to quantify.
Questions such as..why buy S8 when these litigations regarding S8 were not cleared up or finalised ?
Did they pay too much for S8,as the S8 brandname may well be badly tarnished?
Are MFS too eager to expand,and as a result due diligence was not paid its dues ?
Interesting times...I sold some MFS down today and may sell more if the share price does not show signs of recovery.
It puts the share entitlement at $5.10 in jeopardy,it is underwritten ...so that is a positive.
vishalt
29th-June-2007, 01:35 AM
The only reason its getting hit hard is because its surged almost 70% year-to-date, even @ 5.74 (today's price) MFS is up 55%, and I think its a gem of a company.
I'm buying into it again as its bounced off support quite sharply, hopefully the sell-off is over and it can resume to be the next BNB/MBL.
The only reason its getting hit hard is because its surged almost 70% year-to-date, even @ 5.74 (today's price) MFS is up 55%, and I think its a gem of a company.
I'm buying into it again as its bounced off support & created a higher high, but the volume isnt too convincing but I got a stop under support. Hopefully the sell-off is over and it can resume to be the next BNB/MBL.
scsl
7th-July-2007, 05:43 PM
Found this on egoli, dated 29 June 2007. Please note that 'MFSJZB' refers to one of ABN AMRO's warrants over MFS.
MFS Limited (MFSJZB) – Time to Top Up
ABN AMRO has been a supporter of the MFS story since late last year, with the stock rallying as high as $6.85. The stock has recently pulled back from this high to its medium term uptrend, with a bullish move yesterday the stock looks to have turned and should push up towards our 12 month price target of $7.92. Buy MFSJZB
ABN AMRO warrants first called MFS as a buy on the breakout of the $4.50 level at the top the trading range in December 2006. On this breakout the stock managed to rally to $5.80 before selling off back down towards the key $4.50 level. The stock found support around $4.60. If we run a trend line from the last turning point before the stock broke out of its trading range to this $4.60 level, it can be seen that more recently, MFS managed to bounce off this trend line support and looks set to move higher from its current levels.
MFS continues to make aggressive acquisitions which provide further potential upside going forward. Following the divestiture of its stake in HFA holdings and successful integration of S8, the company looks set to continue completing value accretive acquisitions and divestitures with a strong pipeline of deals. The company continues to roll out assets into specialist funds and looks set to report a strong full year result. ABN AMRO has a 12 month price target of $7.92, and the company is currently yielding close to 5%.
Also, for those interested in buying MFS, it doesn't hurt to know that MFS has the highest rating from analysts, with the highest possible recommendation of 5 (along with NWS, PEM, TSL). The average price target is $7.53. Not bad at all for a non-resource company! See Friday's FinRevew, page 37.
Hephaestus
22nd-July-2007, 04:18 PM
Have we got any new news or new analysis on MFS? The stock has improved dramatically since it 5* rating by analysts. Last close of $5.92 is sure testing the $6 latest high. Further comments on a follow though? If so, Monday's expected negative start to the All ords may be a good time to stock up on this one (i'm still waiting for my recovery to $6.40!).
kennas
8th-August-2007, 12:19 PM
Gee, this has fallen from grace. Looks like it's hitting support and what could have been a projection from the H&S. One to watch for a turn around perhaps.
(not holding)
dubiousinfo
8th-August-2007, 01:26 PM
Kennas,
Where was your chart on Monday when I needed it, bought back in at around $5.40. :D
Even tho this was a long term buy, an entry at $4.50 would have been nice.
But seriously, looks like a great call kennas.
Dukey
30th-November-2007, 01:12 PM
Having a look at MFS with a view to possible future buy - to diversify a bit.
Stella will now be retained for the moment and from my initial gander it may not be a bad thing. seems to be raking in some good $ in the UK.
This is gleaned from the recent guidance announcement from MFS re Stella...
Earnings guidance
- Stella group - FY08 ~220M$ FY09 ~280M$
MFS - FY08 (total including Stella)
EBITA min 490M
NPAT min 273M
EPS min 58cps
(estimates recurrent portion of EPS in FY08 at 45cps)
* note - this 08 EPS is well above current forecasts on comsec of 45.3 cps
Sounds like a goer to me - but wondering what current holders are thinking about MFS and the lack of a deal for Stella group?? Any comments there?
----------------
robert toms
30th-November-2007, 03:39 PM
I still hold a few,sold a few...
Regarding holding stella 100%...From what I have seen the plan for MFS has been to buy assets...enhance the value...sell at a tidy profit...and then look to repeat the operation...all the while having as a mainstay their funds managements business.
I think that holding Stella is a plus...if it is profitable and has potential why sell? I suppose only if you are sure that you can do better elsewhere.
What was said in the AFR today by MFS was that analysts now have a chance to value MFS properly.. and hopefully that will lead to more recommenations and buying pressure.
That is how it sounded to me.
Dukey
30th-November-2007, 05:07 PM
Thanks RT.
MFS is a bit difficult to put a value on with fingers in so many pies!!
I also noticed on comsec 'shareholders' page that this stock seems to be traded (played with??) a lot by some of the big boys - JP Morgan Chase; ING; BnB; UBS - all buying generally 5-6% and selling in the relative short term, often to buy again later. Not sure of the exact implications of this for MFS - but would like to look closer at the timing of these transactions!!!
will post on that if/when i get around to doing it.
good luck -E
rgdk
10th-January-2008, 03:46 PM
Does anyone have any inkling of rumours surrounding MFS?
The stock has been hammered of late, much more than any of its comparables in spite of no negative releases by the company, generally positive broker recommendations and nothing that I can see that would make it more risky than its peers (and defining who they are is actually a job in itself...)
I bought some on weakness today to add to my long term holding but the knives surely seem to be out for this one right now.
Pager
10th-January-2008, 04:23 PM
Does anyone have any inkling of rumours surrounding MFS?
The stock has been hammered of late, much more than any of its comparables in spite of no negative releases by the company, generally positive broker recommendations and nothing that I can see that would make it more risky than its peers (and defining who they are is actually a job in itself...)
I bought some on weakness today to add to my long term holding but the knives surely seem to be out for this one right now.
I noticed today particualy it got smashed, i dont own it but its on my watch list of possible buys, think like other similar finacial companys with complex debt structures its a bit of an unknown to value in the current debt crisis, AFG is a similar story, been smashed for no apparent reason rather than fact, AFG have even come out and said they have no debt problems or exposure to any that are dodgy but so far its done no good and the SP is well down.
Dukey
11th-January-2008, 10:11 AM
I noticed today particualy it got smashed, i dont own it but its on my watch list of possible buys, think like other similar finacial companys with complex debt structures its a bit of an unknown to value in the current debt crisis, AFG is a similar story, been smashed for no apparent reason rather than fact, AFG have even come out and said they have no debt problems or exposure to any that are dodgy but so far its done no good and the SP is well down.
Announcement yesterday from MFS...
"Proposal for an MFS entity to become the independent responsible entity only of approximately 35 unlisted closed end Centro property syndicates.... proposal does not relate to any real estate acquisitions"
Can anyone decipher this 'financial speak'?... what does it actually mean for MFS... and Centro for that matter.
Is it possible the hammering yesterday may have been unfounded panic - Re CNP. and MFS could bounce nicely today???
lets wait and see.... If it bounces... I'll miss out cause I got stopped out of my small parcel yesterday!!! :rolleyes:
... Down a little more on open so far...
---------------
sorry - announcement was this morning - not yesterday.
Hephaestus
11th-January-2008, 10:25 AM
MFS sold its Sydney Park Hyatt Hotel in mid December for $201 million - made news on 21 December. This coincided with the beginnings to the second half of this correction. The Park Hyatt was a stable earner for this company...
just pondering.
Pager
11th-January-2008, 12:16 PM
Well its getting well and truly shafted today, down over 15%, obviously the market doesn't like the announcement re its intentions with Centro.
currently $3-30, low has been $3-21 but opened at $4-05 :eek:
Anyone want to speculate why the hammering is so severe, could be picking up some of Centros better assets at knockdown prices as far as i can see :confused:
Dukey
11th-January-2008, 12:22 PM
Well its getting well and truly shafted today, down over 15%, obviously the market doesn't like the announcement re its intentions with Centro.
currently $3-30, low has been $3-21 but opened at $4-05 :eek:
Anyone want to speculate why the hammering is so severe, could be picking up some of Centros assets at knockdown prices as far as i can see :confused:
:eek:Woah!! Damn glad I got stopped out now!! down over 20% this week!
The announcement seemed to specifically say that they were NOT acquiring any CNP assets - to my reading - but there must be something BIG going down!!
Was there any dealings/relationship between MFS and CNP before CNP crashed??
Re the hotel: I figured they wouldn't sell it unless it was good deal.... but now I'm thinking they may have needed the cash...???:confused:
Pager
11th-January-2008, 12:32 PM
I bought in at $3-25 but just sold half the parcel at $3-60.
If it starts going back down i will dump the rest at breakeven.
robert toms
11th-January-2008, 12:32 PM
I am not sure what the financial speak means... MFS wants to be the responsible management entity for funds means....but I will have a guess that it means that they have offered to manage the funds which were previously managed by Centro...the management fees may be at a discount to those usually charged.
MFS would only get a fee for service out of this deal ?
The very linking of the name MFS with Centro seems to have caused a panic or a rush to sell MFS.
The rush started yesterday and about ten million shares on MFS were traded...seems like some,perhaps, had early knowledge of today's announcement and got in yesterday.
In the absence of any bad news their previous announcements still hold ,I hope.
I am hanging on !
rgdk
11th-January-2008, 12:32 PM
Re the Centro announcement, I am glad that others also can't decipher the financial doublespeak. The way I read it is that there is an implied threat or negativity underlying the announcement due to its very cautious tone, although I have no idea what it is.
Quite possibly, this tone alone, given the leprosy with which Centro currently is afflicted, has lead to a "guilty by association" verdict on MFS. This kind of ridiculous panic dumping could be an opportunity for buying... but time will be my judge on that one.
Hephaestus
13th-January-2008, 12:05 PM
Surely now that MFS has increased cash reserves courtesy of the Park Hyatt sale, they are in a strong position to pick some of the meat off Centro, and that this is an OPPORTUNITY for MFS?
I paid $6.47 months ago, imagine my pain! I see $3.25 as a buying opportunity, at a P/E of ~6.5.
Dukey
14th-January-2008, 10:19 AM
Strange goings on with MFS today...
buy orders up to 3.90; sell orders down to 3.30- but no trading so far and no trading halt announced ???
Was interested to see where this one opened today...Does anyone know why this would be happening?
(there were 75000k shares traded pre-open).
-dukey
-----
edit -CNP does have a trading halt - may be something to do with that.??
The Mint Man
14th-January-2008, 10:25 AM
Strange goings on with MFS today...
buy orders up to 3.90; sell orders down to 3.30- but no trading so far and no trading halt announced ???
Was interested to see where this one opened today...Does anyone know why this would be happening?
(there were 75000k shares traded pre-open).
-dukey
-----
edit -CNP does have a trading halt - may be something to do with that.??
Im watching this too:sly: They have some news that is ment to come out soon I believe... but its taking its damn time!! gotta go
Cheers:D
Edit: merger proposal with CIY
Dukey
14th-January-2008, 11:31 AM
Well there is an announcement out of merger - or is it a t/o? - proposal with city pacific. - Minus the 'stella group.'
Still no trading halt (that I saw) and still no trading!!!
beats me how this works............??
The Mint Man
14th-January-2008, 11:40 AM
I know... see edit in my last message;)
Up 15% when it opened but come of a little now.... Knew I should have got on on friday:banghead:
Prospector
14th-January-2008, 12:10 PM
I think it is my fault - usually when I sell a share that is a trigger for a price rise. Today, the trigger was on for MFS and a sell order placed before the market opened, but maybe I tricked the market coz I cancelled the sell order just before opening.:p:
UPKA
14th-January-2008, 04:28 PM
Michael Hiscock non-exe director was forced to sell 500,000 shares due to margin call.
The sell off was unexpected and out of his control, I'm sure he'll buy in again if he hasn't already done so. I used to work with Michael, always recommended MFS to me. For an "insider" to have such confidence with the company, I'm sure the run is still ahead, good luck to all holders :)
chicken8
14th-January-2008, 04:33 PM
a friend of mine works under michael hiscock and was informed that the takeover bid is too low
expecting a higher bid or a hostile takeover
both of which should favour the share price
michael_selway
14th-January-2008, 07:46 PM
a friend of mine works under michael hiscock and was informed that the takeover bid is too low
expecting a higher bid or a hostile takeover
both of which should favour the share price
4.50 or 5.00 woudl be a fair price in current conditions & numbers
Well I thought I had missed this one so I went for a round of golf today only to come back to find them well off, for no apparent reason either IMHO:2twocents. So I took advantage and got in around $3.30.
By the way heres the merger ann from yesterday, surprised no one has posted it yet:confused:
ASX / MEDIA RELEASE
CITY PACIFIC/ MFS MERGER PROPOSAL
City Pacific Limited (CIY) advises that following discussions with MFS Limited (MFS) it has made a conditional proposal to the board of MFS to acquire MFS’s business excluding the Stella Tourism Group.
The board of MFS has advised that it will evaluate the proposal as it agrees with CIY that a merger of the two financial services businesses will produce substantial synergies and revenue enhancement opportunities.
The proposed transaction is subject to the completion of satisfactory mutual due diligence, final approval of the boards and shareholders and certain rulings and clearances including rulings from the Australian Taxation Office.
The parties will seek to undertake due diligence over the next few weeks and agree on the most appropriate manner to implement the transaction.
Subject to due diligence the proposed transaction would involve the issue of 225 million new CIY shares in consideration for the acquisition of MFS’s financial services business. On the basis of each CIY share being valued at $3.70 per share and on the assumption that the MFS financial services business will hold ongoing net debt of approximately $500 million the transaction has an enterprise value of approximately $1.33 billion. This consideration is based on the relativities of both company’s confirmed FY08 guidance.
There will be significant benefits to both sets of shareholders that will result from the substantial cost synergies and revenue enhancement opportunities that the merger will create. It is proposed that the new shares would be distributed to MFS shareholders.
The merger proposal is complex but will be pursued expeditiously and the market will be kept informed of substantive developments as they occur.
CITY PACIFIC LIMITED
Phil Sullivan
Managing Director & CEO
Hopefully we will get some other players come into the mix for this one;)
Cheers
The Mint Man
15th-January-2008, 04:56 PM
Would also like to point out that as a result of this merger deal, MFS shareholders will end up with both MFS and CIY shares. CIY will be a property funds management company and MFS will keep stella, which is a travel business. If Flight centre's PE is anything to go off then the future for stella looks very good indeed;)
Cheers:D
rgdk
15th-January-2008, 05:36 PM
Would also like to point out that as a result of this merger deal, MFS shareholders will end up with both MFS and CIY shares. CIY will be a property funds management company and MFS will keep stella, which is a travel business. If Flight centre's PE is anything to go off then the future for stella looks very good indeed;)
Cheers:D
Good comment Mint Man.
I have always found it odd that MFS is lumped in the "mini-Macquarie" group and is savaged accordingly due to current sentiment to the point now where it is trading at a PE of around 7. Yet it is essentially almost 50 % a travel services company and one of its peers in travel (although of slightly different business composition), FLT has seen a market re-rating to a PE over 20.
I strongly believe that there is some seriously irrational selling going on in this one (and a huge number of others!!) I also concur with those stating that the merger proposition is on the cheap side - I would add 'opportunistic' to that!
robert toms
16th-January-2008, 09:33 AM
Trading halt on this one re separation of their financial division from Stella...I was looking to pull the pin on this one today as sentiment against them with their gearing level in this climate.
It has been a good ride with this one and am glad I took profits along the way...I hope their engineering puts some value back in the the old MFS...as one AFR reporter would say ...too much OPM.
The Mint Man
16th-January-2008, 09:49 AM
Trading halt on this one re separation of their financial division from Stella...I was looking to pull the pin on this one today as sentiment against them with their gearing level in this climate.
It has been a good ride with this one and am glad I took profits along the way...I hope their engineering puts some value back in the the old MFS...as one AFR reporter would say ...too much OPM.
Thanks for that info mate.... didn't even notice that Ann as my computer is down ATM (on my missus comp now) so I'm not able to get news feeds via my Comsec PT:banghead:
It does not mention CIY anywhere in that ann, is it possible other players are interested?
Cheers:D
Hephaestus
16th-January-2008, 09:59 AM
Thank god, a buffer to todays expected battering. At $3.18, MFS is P/E 6.5 and paying a 9.8% fully franked dividend, with expected upside in EPS and DPS. This is sell off is a joke. I was even hoping to buy at <$3 today to neutralise a 51% loss.
Don't forget market sold down MFS yesterday mainly on Centro concerns only, not on their perceived "mini-MQG" status.
robert toms
16th-January-2008, 12:35 PM
I got a peek at AFR today...one analyst,I think Maquarie,values MFS at at least $5,and said that the City Pacific bid was way too low.Also said that their debt was in no way comparable to Centro etc.
What spooked me yesterday was the selling of name "MFS" to an American entity...especially after all of the promos,golf sponsorship,etc to promote the brand.I thought that they would be desperate for cash to do that.But all may be revealed when trading commences again.
UPKA
16th-January-2008, 01:04 PM
I got a peek at AFR today...one analyst,I think Maquarie,values MFS at at least $5,and said that the City Pacific bid was way too low.Also said that their debt was in no way comparable to Centro etc.
What spooked me yesterday was the selling of name "MFS" to an American entity...especially after all of the promos,golf sponsorship,etc to promote the brand.I thought that they would be desperate for cash to do that.But all may be revealed when trading commences again.
I doubt its the name change factor that caused the huge drop in SP. A few sellers sold it down, then a few margin calls came in, thats when the stocks got hammered. I think it's still the sub-prime factor, as MFs is heavily geared, although only 10% of it's $1.5b debt is due in short term. I've read a few different brokers reports, all put a $5 value on the stock, possible price target of $7 (estimated by egoli). Looks like the merger is very possible, but CIY definitely need to better their offer!
yawomanjas
16th-January-2008, 02:17 PM
Maquarie rates this stock at 7.15 as of yesterday....
What spooked me yesterday was the selling of name "MFS" to an American entity...especially after all of the promos,golf sponsorship,etc to promote the brand.I thought that they would be desperate for cash to do that.But all may be revealed when trading commences again.
I'd rather them sell the name as the promotion they have done was mainly to do with the financial side of things, not travel. It would probably be easier to start fresh with a new name that says "were involved in travel" as opposed to "hey we were mainly financial before but now were travel... got that?":confused:
On another note, I think the huge drop had more to do with bad (even misinformed, scare mongering I might add) articles in some big papers. I noticed an article out by 'The Australian' that day which basically likened MFS to a centro style debt crisis, here it is;
A conditional scrip takeover bid has been launched by City Pacific for fellow Australian property investment group MFS. The offer of about $A1.33bn follows aperiod of extended negotiations on such a move, which now comes at a time when the real estate sector is experiencing difficulties due to the global credit crisis. Both entities are relatively debt-laden, and some experts caution that MFS shareholders may be saddled with stock in a group that has an elevated level of loans in default. MFS also must source new financing for some $A150m in debt in the first quarter of 2008. It has been pursuing an infrastructure fundmanagement strategy of late. On 14 January 2008 its stock closed at $A3.94,compared with City's offer and own share price of $A3.70
Obviously I have something to say about this;)
With only $150m in debt due, MFS will easily be able to take care of things. They are currently sitting on over $300m cash at bank so they are clearly well equipped to handle this level of debt.:2twocents
Cheers:D
Dukey
17th-January-2008, 09:58 AM
Announcement last night...Non-exec director Michael Hiscock has resigned.... reluctantly... interesting...:sly:
Anyone got the inside scoop on that??
chicken8
17th-January-2008, 10:15 AM
possibly because he had to sell 500,000 shares in the company due to a margin call.
either way MFS hasn't opened yet. so perhaps this wasn't the news that initially put MFS into a halt
UPKA
17th-January-2008, 10:37 AM
I think Michael's resignation got to do with the planned restructuring of the company. Or it may be because of other personal commitments, he's director for 2 other companies as far as I know... not something we'd stress about as he only holds a rather lightweight position with MFS.
The Mint Man
17th-January-2008, 10:58 AM
Announcement last night...Non-exec director Michael Hiscock has resigned.... reluctantly... interesting...:sly:
Anyone got the inside scoop on that??
possibly because he had to sell 500,000 shares in the company due to a margin call.
either way MFS hasn't opened yet. so perhaps this wasn't the news that initially put MFS into a halt
I think Michael's resignation got to do with the planned restructuring of the company. Or it may be because of other personal commitments, he's director for 2 other companies as far as I know... not something we'd stress about as he only holds a rather lightweight position with MFS.
:confused::confused::confused:
Ummm.... is it just me or are we talking about 4-5 day old news? This happened (the sale of 500000 shares) way before the trading halt. I thought last nights Ann was merely a formality?
Anyway, I don't think this has anything to do with the trading halt.
rgdk
17th-January-2008, 01:29 PM
Further to Mint Man's comments regarding irresponsible scaremongering in the media the same tack was taken in The Age's reporting of the proposed merger b/n CIY and MFS in which they referred to MFS as "struggling", quoting their share price depreciation as evidence, not anything tangible in terms of their business performance. They also implied that the lack of the ability to divest Stella was a negative - in my view, the fact that they have kept it indicates that see long term value in travel and that they CHOSE not to sell it in the end. Certainly negative scaremongering is the flavour of the day for lightweight journalism.
And as no one as actually stated it yet, in the application for the trading halt MFS specifically stated that it was in relation to consideration of a possible structural separation of MFS FS and Stella. But I think the decision was also prudent given the panic selling that has been going on in the stock due to misinformation.
Prospector
17th-January-2008, 01:48 PM
And further to the margin calls resulting in a Director selling off a huge parcel; surely, as a Director of a Company, there should be legislation in place whereby Directors cannot use their company's shares as leverage for a margin loan - they should be kept separate, and if they can only afford to buy them on margin, they shouldn't be allowed to buy these shares at all?
Joe Blow (sorry JB) selling shares as a result of a margin call is one thing; a Director having to offload mega shares is a totally different one.
ASIC, where are you?
The Mint Man
17th-January-2008, 05:03 PM
Certainly negative scaremongering is the flavour of the day for lightweight journalism.
Yeh well said. I think we are going to see a bit more of this too. After all they need some headline news as there is no other 16 year olds throwing huge parties that they can pin to the headlines for 4 days straight:banghead::rolleyes: probably means that the market is nearing its low, isn't that the way it normally works?
chicken8
18th-January-2008, 10:29 AM
can someone please explain what is going on
why are we down 25% when we'll be getting shares in stella and MFS
and then the takeover will put MFS shares above $3 a share alone
i'm just trying to make sense of all this
UPKA
18th-January-2008, 10:32 AM
can someone please explain what is going on
why are we down 25% when we'll be getting shares in stella and MFS
and then the takeover will put MFS shares above $3 a share alone
i'm just trying to make sense of all this
http://www.goldcoast.com.au/article/2008/01/18/6896_gold-coast-business.html
this article might explain it a bit more, looks like hedge funds selling out, forcing the price down, i can see a lot of large accumulation going on. the current irrational price is only temporary.
GreatPig
18th-January-2008, 11:45 AM
the current irrational price is only temporary.
You're not wrong there. It's currently down about 64% and still appears to be falling.
The next Centro?
GP
chicken8
18th-January-2008, 11:46 AM
You're not wrong there. It's currently down about 64% and still appears to be falling.
The next Centro?
GP
but the thing is i need an explanation. this doesn't make any sense. at a market cap of $600mill and falling. they have $300mill in cash and $150mill a year income coming in
this equation just does not make sense
The Mint Man
18th-January-2008, 11:53 AM
Cant agree more with your comments. This to me seems like hedge funds short selling and creating panic, which they are doing a damn good job of. I think it would be odds on for a big bounce monday IMO:2twocents
rgdk
18th-January-2008, 11:53 AM
I agree withe last few posts - there is nothing IN THE MARKET that could even remotely be contributing to the rout. Something someone else knows?
Or is it a snowball effect of hedge funds and margin calls? I am completelt dumbfounded... and much poorer than I was 2 hours ago!
robert toms
18th-January-2008, 11:59 AM
I tend to be a pessimist in these situations,but what has happened has surprised me....will City Pacific still stand by their original offer ? Looks good now!
Well ,there is no pulling the pin now....too late for that.
GreatPig
18th-January-2008, 12:00 PM
While the company appears to be called just MFS Limited now, it used to be called MFS Leveraged Investment Group.
Maybe that italicised part has something to do with it.
GP
UPKA
18th-January-2008, 12:04 PM
While the company appears to be called just MFS Limited now, it used to be called MFS Leveraged Investment Group.
Maybe that italicised part has something to do with it.
GP
yes the company may be built on debt, but as stated and confirmed over and over again, there's only $150m short term debt due, i dont understand what the issue is... like said, its hedge funds getting out, triggering a lot more stop losses and margin calls. THIS IS NO CENTRO... they dont own anything in US, plus most of their properties are hotels n resort, valued completely different to your average property fund...
rgdk
18th-January-2008, 12:05 PM
Actually, further to my last post, my only in market explanantion of the sell off is the market viewing the $550 million recapitalisation as an underhand admission of credit problems.
Almost 10% of the shares on issue traded in 2 hrs!
chicken8
18th-January-2008, 12:15 PM
MFS is in the ASX200. and last week there were quite a few buy recommendations from brokers on MFS
so alot of people would have went into MFS margined
and now everyone got called.
so im guessing the drop down to $2.50 was from hedge funds dumping
drop down to $1.50 was margin calls
and drop down to $1.03 was just fear
but the question is. where do we get back to from here?
rgdk
18th-January-2008, 12:32 PM
The following is off The Age website just now - looks like they reckon it is the evil four letter word too:
Shares in funds manager MFS have fallen more than 50 per cent this morning on concerns about the level of debt it is carrying.
Brokers said investors were also worried about the level of debt being carried by rival City Pacific Ltd, which has made an offer to buy MFS' financial services arm.
MFS announced today it would split the financial services and its Stella tourism businesses into two separately listed companies.
MFS said the spilt would allow both businesses to be "recapitalised to reduce indebtedness and to achieve capital structures that are appropriate for the different markets and capital requirements of these respective businesses."
Auststock Securities senior client adviser Michael Heffernan said the market had punished MFS for mentioning that the split would allow it to reduce its debt.
"Anyone that mentions debt to the market at the moment is setting themselves up for a hammering, and where there's smoke there's fire in this sort of situation," Mr Heffernan said.
"It might be irrational, but that's the way market is at the moment.
sideshowbob
18th-January-2008, 12:38 PM
im tempted to gamble
and put a good pile of cash in MFS today.????!
If there is a rebound this week... surely MFS is a good buy at $1.3.
chicken8
18th-January-2008, 12:50 PM
i'm not sure whats a good price for MFS anymore
but i just tripled my holdings in MFS at $1.30
it had to be done
Hephaestus
18th-January-2008, 12:53 PM
Did any of you listen in on the teleconference announcement today? Was it any different to anything else in the news?
Do MFS really still have that $300 million in cash lying around? All i can say is down 80%, and considering a massive purchase in preparation for a half decent bounce.
I would like to get my hands on some detailed financial info.
sparky
18th-January-2008, 01:06 PM
At 1.3 this seems like a good buy, only a month ago they were at close to $5. It seems like the mention of debt has every running, what do people think? What else can go wrong? or is there something we don't know...
rgdk
18th-January-2008, 01:17 PM
Okay, I have some more information that explains the sell off which is very much related to debt.
The guys at Rivkin have just called it a sell at current levels based on the following: If the compay is truly travelling well, then why the need to recapitalise? Either as a reaction to current market sentiment or because there really is a problem.
They also stated that many others in the teleconference shared their sentiments.
I can't say what really is the case but I would probably disagree with the sell recommendation given the current proposal on the table from CIY. Of course if todays announcement sends CIY reunning then that's another story.
This is causing me alot of pain at the moment, but I certainly can't see a huge rally without some catalyst. Or if there is truly nothing wrong, then the market realising and becoming confident in that will take some time IMO.
Gee, selling out at 3.18 looks attractive now!
Prospector
18th-January-2008, 01:28 PM
This is causing me alot of pain at the moment, but I certainly can't see a huge rally without some catalyst. !
I am hurting with you rgdk! To think I almost sold a few days ago. Surely the fundamentals are still there but gosh their timing sucks, but then again, maybe that is part of the problem too.
The Mint Man
18th-January-2008, 01:30 PM
I am hurting with you rgdk! To think I almost sold a few days ago. Surely the fundamentals are still there but gosh their timing sucks, but then again, maybe that is part of the problem too.
I wondered if you ended up selling this morning as I remembered you saying that you were considering selling. what can I say....:(
Prospector
18th-January-2008, 01:36 PM
I wondered if you ended up selling this morning as I remembered you saying that you were considering selling. what can I say....:(
In a rational moment, I always think back to Ansett. Once Ansett disappeared, then anything can happen. I originally had BRK shares, then when MFS appeared on the scene I stuck with them. Had to vent and sent them an email! Oh well, as if they could care. It is too late for me to sell now, maybe it will improve when the overall market improves. Lucky I am not planning to retire soon.....
The Mint Man
18th-January-2008, 01:40 PM
It is too late for me to sell now, maybe it will improve when the overall market improves. Lucky I am not planning to retire soon.....
I think most would agree there, or at the very least wait for a bounce to recoup some loses then get out.
ithatheekret
18th-January-2008, 01:42 PM
I think the model needs revamping , the current debt load , the last time I looked it was above $3 and I wouldn't touch it then , still won't to be honest , the risk-reward ratio is not enticing enough for me . I'm looking for something under $1 .
GreatPig
18th-January-2008, 01:47 PM
I am hurting with you rgdk!
Bad luck, Prospector. First Bradken and now MFS. I hope you weren't holding Centro as well.
I've fortunately missed the big drops, except for a bit in CVN the other day, but am mostly just dabbling at the moment with a small amount of funds anyway. And that's more just for something to do and the experience than actually expecting to make much money.
Cheers,
GP
Prospector
18th-January-2008, 02:04 PM
Bad luck, Prospector. First Bradken and now MFS. I hope you weren't holding Centro as well.
Cheers,
GP
Well, there is a silver lining, isnt there :o
At least with Bradken, even though such a bolt out of the blue, I was still able to sell for a (much reduced) profit so I probably dont deserve any sympathy for that. But MFS, well, gulp.....I have held them through BRK for years, and nothing like this has ever happened before - they seem so clued up. COU a few days ago experienced the doldrums but has picked up since (well, make that not falling as much anymore) so maybe :o
:o has become my favourite icon in the last fortnight :o
rgdk
18th-January-2008, 02:22 PM
My last :2twocents for the day before I lie down and take a panadol... or something stronger :eek7:
The biggest criticism I think the analysts have with the ann today is that it is completely wishy-washy with respect to what exactly the proceeds from the entitlement issue will be used for in order to dispell any misinterpretations. Surely MFS must have anticipated the reaction to an announcement of this nature with such limited substance.
I would have to share the analysts' criticism :mad: Pretty bad corporate relations management IMO!
UPKA
18th-January-2008, 03:07 PM
Okay, I have some more information that explains the sell off which is very much related to debt.
The guys at Rivkin have just called it a sell at current levels based on the following: If the compay is truly travelling well, then why the need to recapitalise? Either as a reaction to current market sentiment or because there really is a problem.
They also stated that many others in the teleconference shared their sentiments.
I can't say what really is the case but I would probably disagree with the sell recommendation given the current proposal on the table from CIY. Of course if todays announcement sends CIY reunning then that's another story.
This is causing me alot of pain at the moment, but I certainly can't see a huge rally without some catalyst. Or if there is truly nothing wrong, then the market realising and becoming confident in that will take some time IMO.
Gee, selling out at 3.18 looks attractive now!
I think they needed the cash to buy out some of CNP's unlisted property fund... don't think it has anything to do with the debt issue, if it is, then the directors must have big ballz to hide it from the public...
YOUNG_TRADER
18th-January-2008, 03:15 PM
omg I saw this fall to $1 but then saw it recover to $1.50, now its back down to 80c what the hell is going on????????????????? :confused:
The Mint Man
18th-January-2008, 03:18 PM
omg I saw this fall to $1 but then saw it recover to $1.50, now its back down to 80c what the hell is going on????????????????? :confused:
I tell you whats going on #$$@$%#@$#:) were gona be on the news, thats what:o. Were just like the 16 year old who threw a party and trashed everything:eek:
EDIT: only for some this has cost alot more than $20,000 damage. I feel for them, my exposure is nowhere near that
robert toms
18th-January-2008, 03:46 PM
Incidentally all of the MFS spin offs are taking a hiding today...HFA,MFT and MPY.
MPY announced a proposed 12 cent per share payout for the current year...at a SP today of 50 cents that is 24%...I think that there will a revision with that one.
MPY just borrowed for some operating money,surely theirs is a good cash flow business...I went to their Siam Ocean World in Bangkok a couple months ago,the first such facility that I have been to.The entrance fee was equivalent to $25 Australian...only affordable to the well heeled over there.
Very impressive facility ,but how profitable is it ?
Pager
18th-January-2008, 03:59 PM
I bought in at $3-25 but just sold half the parcel at $3-60.
If it starts going back down i will dump the rest at breakeven.
I think that's called "by the skin of my teeth" :)
Makes you wonder if there are any other horror story's out there about to announce bad news, there coming a bit too quick for my liking :mad:
UPKA
18th-January-2008, 05:26 PM
This is one of the worst day in my short trading career... and certainly didn't see this coming at all, I always calculate the risk im taking when entering a stock, this is just out of my world... good luck all holders...
roland
18th-January-2008, 06:53 PM
well, just in - Barclays dumped 10,500,000 MFS shares - they got out at $2.47 - just horrible stuff - I'm down 26% - probably not as bad as some, just add me to the pile of mourners out there.
rgdk
18th-January-2008, 08:12 PM
Well where to from here?
Unless Michael King can deliver something pretty special this year I have no idea.
Judging from this report of the teleconference this morning it sounds like he has no institutional supporters any more >> MFS's gruesome hour (http://www.businessspectator.com.au/bs.nsf/Article/MFSs-gruesome-hour-AY4S2?OpenDocument)
As much as it pains me to say this, I can't see any major upside for this one aside from a dead cat bounce - on which I will be trying to reclaim significant losses. Time to recover what I can and look elsewhere...
Commiserations to MFS holders. I had BKN which was a bolt from the blue similar to this.
Expected BKN to recover somewhat but sold it last week at 52% less than I paid for it - by far the biggest loss ever. A far cry from your profit, Prospector, even though I know you gave back considerable paper profit.
Thankfully I sold MFS late last year.
Hope you get at least an interim bounce for those who want to get out.
Ken
18th-January-2008, 11:29 PM
I have spent 20 minutes looking into this saga.
All I can see is that MFS want to split there business, and basically raise money so that one half of the company does not carry any debt.
Lets just say this split does not take place, due to the negative reaction from shareholders and business goes on as usual.
It would then mean MFS continues in the same fashion that got the share price as high as $6.00
It would continue to pay dividends of 20 cents, and have earnings per share of 48 cents.
Surely major shareholders would want this to occur?
From what I can see there has been an over reaction in companies that carry debt.
But that is probly a very simplistic way of looking at it.
I would love to see where MFS is in 12 months time. I am not going to compare it to CNP or Rams because from what I can tell they are totally different businesses that have been flogged due to the US sub-prime debt market saga.
Am I missing something?
Have the fundamentals of MFS changed?
I think theres a chance if the US market bounces which I believe it will, then MFS could well put on 20-30% but looking at CNP, I wouldnt be holding if you bought on close.
Good luck, seems like a gamble until the story unfolds.
nomore4s
19th-January-2008, 12:06 AM
Commiserations to MFS holders. I had BKN which was a bolt from the blue similar to this.
Expected BKN to recover somewhat but sold it last week at 52% less than I paid for it - by far the biggest loss ever. A far cry from your profit, Prospector, even though I know you gave back considerable paper profit.
Thankfully I sold MFS late last year.
Hope you get at least an interim bounce for those who want to get out.
Julia, sorry to hear about your loss with BKN.
I think there is a good chance for a bounce (an automatic rally), something along the lines of what happened with AED & CNP, just be quick to get out if given the chance.
My best guess atm is that Monday will see another test of 80c or maybe a probe lower before some sort of rally, which like CNP could last 1-2 days or a number of days like AED, will then be looking for a blow off top to signal the end of the rally and eventually another test of the lows.
For discussion only. Please DYOR. Good luck to holders.
cordelia
19th-January-2008, 12:35 AM
Commiserations to MFS holders. I had BKN which was a bolt from the blue similar to this.
Expected BKN to recover somewhat but sold it last week at 52% less than I paid for it - by far the biggest loss ever. A far cry from your profit, Prospector, even though I know you gave back considerable paper profit.
Thankfully I sold MFS late last year.
Hope you get at least an interim bounce for those who want to get out.
well i bought PEM at 3.40 and sold at 1.93 after believing it would turn around,. I sold and I am glad because they have dropped anothe 20c and they are still going down....
vishalt
19th-January-2008, 03:57 AM
I hope anyone that held MFS didn't have much quantity in it.
I had 2000 at around $5.50 thinking it was a nice correction from $6.80 or whatever but I got stopped out and then decided a golden rule = only big caps.
Jeez sunk under $1 today, in the newsroom where we work we were quite stunned as MFS did invite our team to golf on one occasion lol.
This US sub-prime thing has been a tragedy for so many people.
vida
19th-January-2008, 04:10 AM
I bought only 1000 at $3.40 very recently and am in total shock and what has happened. I did some quick research before buying and did not find anything to warn me about what was to happen today! Amazing and awful.
I almost bought more at .70c but was too busy and then when I had a minute to spare they were up to 99c again and then I was too uncertain and decided to leave them alone and just hope my $3.40 shares one day pick up
robert toms
19th-January-2008, 06:02 AM
I am left holding 6500 averaging in at $2.77...but sold 12000 at $4.60 months ago.After that they went over $6...sounds pretty good now,at the time I thought that I timed it very badly.
When I went for a walk with my dog last night I asked him what he thought of the MFS demise and he said that the only positive that he could see was that for every seller there is a buyer....and unless there is an unexpected change that they have to be dreaming if they want to raise $550 million from shareholders.
The dog was born blind,but he has other attributes...a moist and tender Coles chicken for him today.
vida
19th-January-2008, 09:27 AM
There may be more sellers than buyers at times, so not quite true that for every seller there is a buyer - your dog needs a re-think.
On further checking information it appears that MFS is roughtly about $1 bill in debt and not just the $150 mill they have to pay up on in a few months. Its amazing how cocky management was/is to accumulate assets by incurring such incredible liabilities. It doesn't make any sense really except to call it 'greed' to be the biggest.
Hopefully management does not need to rely on the $500,000 raising as they obviously won't be able to do it and announcing this prospective raising has spooked its investors and caused the panic selling. Some brokers apparently are telling their clients that it will all be ok and not to sell. I can't help wondering if these brokers are receiving commissions from MFS or some personal agenda in giving this advice, or maybe they are simply right on.
I am wanting to think all will be well and the panic is unwarranted - the SP is terrible relative to what it was but that will not affect the company's performance at all except for the fact that capital raising by issuing more shares won't be an option in these circumstances. I hope that they don't depend on this for their continuing viability, my goodness what a shock.
I am left holding 6500 averaging in at $2.77...but sold 12000 at $4.60 months ago.After that they went over $6...sounds pretty good now,at the time I thought that I timed it very badly.
When I went for a walk with my dog last night I asked him what he thought of the MFS demise and he said that the only positive that he could see was that for every seller there is a buyer....and unless there is an unexpected change that they have to be dreaming if they want to raise $550 million from shareholders.
The dog was born blind,but he has other attributes...a moist and tender Coles chicken for him today.
Hephaestus
19th-January-2008, 09:31 AM
After my comments, and unable to find out more about the teleconference at the time, I bought in at $1.26 thinking a bargain, then watched as MFS got slammed. Now hold 5800 @ $3.12. Pray there is a bounce, and that M King confirms the company can support itself without the $550 million raising.
Stories at SMH, AFR websites give M King a real thrashing.
Good luck all.
reece55
19th-January-2008, 09:36 AM
There may be more sellers than buyers at times, so not quite true that for every seller there is a buyer - your dog needs a re-think.
On further checking information it appears that MFS is roughtly about $1 bill in debt and not just the $150 mill they have to pay up on in a few months. Its amazing how cocky management was/is to accumulate assets by incurring such incredible liabilities. It doesn't make any sense really except to call it 'greed' to be the biggest.
Hopefully management does not need to rely on the $500,000 raising as they obviously won't be able to do it and announcing this prospective raising has spooked its investors and caused the panic selling. Some brokers apparently are telling their clients that it will all be ok and not to sell. I can't help wondering if these brokers are receiving commissions from MFS or some personal agenda in giving this advice, or maybe they are simply right on.
I am wanting to think all will be well and the panic is unwarranted - the SP is terrible relative to what it was but that will not affect the company's performance at all except for the fact that capital raising by issuing more shares won't be an option in these circumstances. I hope that they don't depend on this for their continuing viability, my goodness what a shock.
Vida
I couldn't agree with you more about the rapid rate at which they debt financed their purchases. To be frank, I never liked this Companies strategy - I mean a tourism business bundled with investment style entity never made sense. Add to that the fact that their unlisted satellite funds are primarily into fixed interest, which obviously would be under pressure in this environment.
However, in regards to your point about hoping that MFS didn't need the money from the flagged rights issue (which coincidentally now is as big as their market cap!), I think the reality is that they can't do with out it - only a desperate Company raises money in a market that the **** has fallen out of. I would stress to anyone who was thinking about picking up a bargain, I think there is much more pain to come, these guys have been on a binge and is not feeling very well atm.
My condolences to anyone left holding this stock yesterday - clearly your board has not fulfilled their continuous disclosure obligations, because there should have been something announced well before this blood letting about the Companies financial position. Add another potential class action to the list.
Cheers
Prospector
19th-January-2008, 10:29 AM
I bailed - I had to get rid of the stress of just wondering what will happen next, and now seem to have wiped out any capital gains I have crystallized this year (still in paper profit over all though, thank god!) so maybe this means I wont be paying any CG tax this year :o There it is again, my new favourite icon :o
There seems to have been some shareholder manipulaton going on about debt levels. Interesting. I am hands up for a class action, even if it was just to cause them some sleepless nights. And threat of jail. Insider trading maybe? - the sp has been very slowly hemorraging in the last couple of months, but really not enough to warrant any real scrutiny.
CranG
19th-January-2008, 11:51 AM
There may be more sellers than buyers at times, so not quite true that for every seller there is a buyer - your dog needs a re-think.
On further checking information it appears that MFS is roughtly about $1 bill in debt and not just the $150 mill they have to pay up on in a few months. Its amazing how cocky management was/is to accumulate assets by incurring such incredible liabilities. It doesn't make any sense really except to call it 'greed' to be the biggest.
Hopefully management does not need to rely on the $500,000 raising as they obviously won't be able to do it and announcing this prospective raising has spooked its investors and caused the panic selling. Some brokers apparently are telling their clients that it will all be ok and not to sell. I can't help wondering if these brokers are receiving commissions from MFS or some personal agenda in giving this advice, or maybe they are simply right on.
I am wanting to think all will be well and the panic is unwarranted - the SP is terrible relative to what it was but that will not affect the company's performance at all except for the fact that capital raising by issuing more shares won't be an option in these circumstances. I hope that they don't depend on this for their continuing viability, my goodness what a shock.
Guys, lets get the facts correct please.
They have never hidden the fact that they have 1.4 to 1.5 bn debt. That only matures between 2010 & 2012. The 150 mil matures in a few weeks and they can pay that with cash. So, please don't compare these guys to Centro of Rams as they are nothing alike.
The entitlements issue is so that Stella can pay back MFS whatever they owe them. It makes for a clean separation of the two entities and makes any mergers or sell, be they with City Pacific or anyone else easier to execute as their finances wont be all mixed up.
There is no issue at all here. Even with Barclays doing a bit of a sell off, i wouldn't be surprised if they Merrill or UBS bought back in at a discounted price on all the panic.
vida
19th-January-2008, 12:04 PM
what you said does make sense and it is pretty much what the company is saying and some brokers around the place seem to be in agreement, so perhaps that is exactly the case and the panic selling is unwarranted.
I hope you are right and that the current SP is simply a market aberration but I read somewhere that the Rivkin guys are saying that some of that long term debt is being called up by the lenders now and that is the real problem. They are not sure this is the case but they are suspecting it may be. Can this be the case? Can the long term debt suddenly need repayment now?
I am preferring to take your version for obvious reasons and its better for my blood pressure even though I only had $3,400 invested it is a lot to me and for that to become $999 overnight and which could worsen, is rather irksome.
Lets see what happens next week and hopefully people will get more information and disclosure and regain confidence in MFS which is what is missing at the moment. Anyway the Stella business side of it is doing well I believe (apart from the debt owed to MFS) and I stayed at one of their resorts (Mantra on Aqueous) in Port Douglas last November, it was divine.
Guys, lets get the facts correct please.
They have never hidden the fact that they have 1.4 to 1.5 bn debt. That only matures between 2010 & 2012. The 150 mil matures in a few weeks and they can pay that with cash. So, please don't compare these guys to Centro of Rams as they are nothing alike.
The entitlements issue is so that Stella can pay back MFS whatever they owe them. It makes for a clean separation of the two entities and makes any mergers or sell, be they with City Pacific or anyone else easier to execute as their finances wont be all mixed up.
There is no issue at all here. Even with Barclays doing a bit of a sell off, i wouldn't be surprised if they Merrill or UBS bought back in at a discounted price on all the panic.
reece55
19th-January-2008, 01:21 PM
Guys, lets get the facts correct please.
They have never hidden the fact that they have 1.4 to 1.5 bn debt. That only matures between 2010 & 2012. The 150 mil matures in a few weeks and they can pay that with cash. So, please don't compare these guys to Centro of Rams as they are nothing alike.
The entitlements issue is so that Stella can pay back MFS whatever they owe them. It makes for a clean separation of the two entities and makes any mergers or sell, be they with City Pacific or anyone else easier to execute as their finances wont be all mixed up.
There is no issue at all here. Even with Barclays doing a bit of a sell off, i wouldn't be surprised if they Merrill or UBS bought back in at a discounted price on all the panic.
Crang
Where do you get your maturity dates from, because the financial statements in June 2007 were deceptively vague - they classified their investment in the Stella group as held for sale and didn't disclose anything in relation to maturity dates or interest rates on 1.4 Bil worth of debt. Reviewing all announcements and presentations, they haven't said a word about their debt in Stella, even when they were price queried by the ASX. I suspect that they debt holders are looking for their money back.......
Barclays aren't stupid - they wouldn't be dumping the stock because they were just worried about market exposure, there must be legitimate reason for doing so and it would appear obvious that it is the debt relating to Stella...
All the best.
Cheers
The Mint Man
19th-January-2008, 01:36 PM
I bought only 1000 at $3.40 very recently and am in total shock and what has happened. I did some quick research before buying and did not find anything to warn me about what was to happen today! Amazing and awful.
I almost bought more at .70c but was too busy and then when I had a minute to spare they were up to 99c again and then I was too uncertain and decided to leave them alone and just hope my $3.40 shares one day pick up
If it makes you feel any better (probably not;)) I'm in almost exactly the same position as you are. We're small fry compared to some out there, and on top of that there would have been others that bought on the way down thinking they could even themself out with a decent bounce. The thought crossed my mind but I decided against it, glad I did.
Prospector
19th-January-2008, 07:20 PM
I am sure within any financial loan contract there is a line which says the loan is payable on demand if circumstances arise. If ever the environment was ripe for a 'payable on demand' demand, then methinks maybe this is what is happening! Just my :2twocents and with no knowledge to back any of this up.
vida
20th-January-2008, 12:08 AM
What will happen to MFS if this is the case, that the long term debt is being called up for payment now? Will it mean the demise of the company asap?
I am sure within any financial loan contract there is a line which says the loan is payable on demand if circumstances arise. If ever the environment was ripe for a 'payable on demand' demand, then methinks maybe this is what is happening! Just my :2twocents and with no knowledge to back any of this up.
chicken8
20th-January-2008, 11:37 AM
how I'd like to think of it is. why would a loan be called forward and then the financial institution possibly taking a discount rate to get their loan back, because the chances of MFS repaying the complete loan in full would be low.
would the bank just cut their losses? or wait it out, collect the interest on the loan and then eventually get their whole loan back.
i think CNP is in a much worse position than MFS and their due dates will most likely be extended so that the banks can recover most/all of their money. i'd like to think this would be the same case for MFS, rather than the lenders say give me my money back today
Prospector
20th-January-2008, 01:34 PM
how I'd like to think of it is. why would a loan be called forward and then the financial institution possibly taking a discount rate to get their loan back, because the chances of MFS repaying the complete loan in full would be low.
But we all know the share market trend is far more than logical thought. Just even the possibility would be enough to make all this happen.
Ken
20th-January-2008, 09:26 PM
MFS are still paying a dividend aren't they????
As far as I can tell nothing has changed?
Just because they are splitting up the company, their forecast for 2008 is still to pay a dividend of 28 cents.
This would be a whooping 28 percent if I am not mistaken.
Could it be that the Centro and Rams home loan debacle has created one of the greatest opportunities to buy MFS at a massive discount to its real value?
There are going to be a heap of margin calls come tomorrow.
But in reality, amid the US turmoil, MFS could have be incorrectly read by the market.
This is a real possibility.
You could smell fear in MFS as it traded from 1.00 to 73 cents in the space of a minute.
IF fear sets in again with MFS then we could see further losses.
My research is telling me the story is either mis-read or untold.
Announcement required by MFS to clarify in my opinion.
vida
20th-January-2008, 09:39 PM
I would prefer to think along the lines you outlined which makes MFS shares a steal at the current SP which may be even lower tomorrow. I will be away most of the day at a cousin's funeral (perhaps people here read about the guy who died after paintballing bucks party in Geelong last weekend - my cousin poor thing). I will have to not think about MFS during the day and won't be able to do anything no matter what happens on the market, bad timing and perhaps for me to stay out of it is the best thing tomorrow.
Good luck everyone !!! Hope it goes up for those holding and selling and down for those buying - and I am in the position of holding and buying ouch
About that dividend they are paying, its been deferred hasn't it and it can still be cancelled. The shares wend ex-dividend a while ago didn't they? Anyone buying them now is not entitled to the latest due dividend I believe? Is that right? this dividend thing is as uncertain as anything else with MFS
MFS are still paying a dividend aren't they????
As far as I can tell nothing has changed?
Just because they are splitting up the company, their forecast for 2008 is still to pay a dividend of 28 cents.
This would be a whooping 28 percent if I am not mistaken.
Could it be that the Centro and Rams home loan debacle has created one of the greatest opportunities to buy MFS at a massive discount to its real value?
There are going to be a heap of margin calls come tomorrow.
But in reality, amid the US turmoil, MFS could have be incorrectly read by the market.
This is a real possibility.
You could smell fear in MFS as it traded from 1.00 to 73 cents in the space of a minute.
IF fear sets in again with MFS then we could see further losses.
My research is telling me the story is either mis-read or untold.
Announcement required by MFS to clarify in my opinion.
Ken
20th-January-2008, 09:57 PM
The dividend guidance is to pay out 60% of reported net profit after tax.
This has not been changed.
The next dividend is due in march.
I dont understand why a dividend would not be paid, seeing as it has not been mentioned in any of the announcements.
There have been no profit downgrades of any sort.
The market appears to have made assumptions, for better or worse I dont know.
The company must clarify Monday if it has any brains at all.
roland
21st-January-2008, 09:14 AM
Latest news:
CIY WITHDRAWS MERGER PROPOSAL
City Pacific Limited (ASX: CIY) advises that after reviewing the demerger proposal
announced by MFS Limited (ASX: MFS) on Friday 18 January, it informed Mr King,
CEO of MFS, late on Friday night that it intended to withdraw its merger proposal,
while maintaining an interest in either the business or assets of the MFS financial
services division.
Discussions continued over the weekend and a draft proposal was submitted,
however the parties were unable to reach agreement.
CIY confirms the withdrawal of the original merger proposal.
CITY PACIFIC LIMITED
Phil Sullivan
Managing Director & CEO
rgdk
21st-January-2008, 09:55 AM
Latest news:
CIY WITHDRAWS MERGER PROPOSAL
Well, I guess that is not surprising! But that is also not going to do a thing for the well being of the SP and investor confidence in management, which I think is at rock bottom right now.
This stock is seriously in need of some disclosure and transparency - as I have no idea as to how it is travelling!!!
I hold alot of this stock and this represents my single biggest loss in 10 years of trading but IMO unless you have a seriously good risk tolerance (or plenty of capital to play with, I would be waiting for more information on this before assuming it is an absolute bargain.
Of course if anyone wants to buy my shares off me at $3 I'll take offers! (To the gullible out there, I am joking by the way, just to 3) )
TheAbyss
21st-January-2008, 10:03 AM
Trading Halt however i dont see an announcement. Is it just Commsec or is the announcemnet out there?
justjohn
21st-January-2008, 10:05 AM
It looks like we're in another trading halt .Hope the outcome is better than last time:eek: ,what more bad news could there be
The Mint Man
21st-January-2008, 10:07 AM
ASX & MEDIA ANNOUNCEMENT
MFS LIMITED – REQUEST FOR TRADING HALT
We request that the ASX grant a trading halt of all MFS Limited’s (“MFS”) securities (ASX codes:
MFS and MFSG) with immediate effect.
The trading halt is requested as MFS is considering unsolicited proposals received last night from
a number of parties in relation to the purchase of a majority interest in Stella as well as a change
in the CEO of MFS.
MFS requests that the trading halt remain in place until the earlier of MFS making a further
announcement in relation to the matters identified above or market open on 23 January 2008.
MFS confirms that it is not aware of any reason why the trading halt should not be granted.
KIM KERCHER
COMPANY SECRETARY
21 January 2008
Also here is a screen shot from my comsec pro trader with the MFS news that has popped up this morning. I hope this helps.
17093
Cheers:D
rgdk
21st-January-2008, 10:10 AM
Well I am kind of glad for the trading halt, as it means I can focus on work with the peace of mind of knowing that at least for two more days my capital is intact!
Nathan_b
21st-January-2008, 10:19 AM
hey guys, what do we all think will happen here? they are still trading, (MFS lifestyle investment group)
Nathan_b
21st-January-2008, 10:20 AM
damn!
spoke too soon...
they have just gone in halt aswell, time will tell on these too.
i do not hold, i am interested in buyng a few though.
nioka
21st-January-2008, 10:26 AM
hey guys, what do we all think will happen here? they are still trading, (MFS lifestyle investment group)
Why not look at the MSF thread, (unless the moderators have already told you that ). Thereis info there.
chicken8
21st-January-2008, 10:28 AM
the 550mill capital raising is set for april/may
their current debt is due in march. $150mill
so the capital raising isnt to HIDE any debt. i personally suspect that its to get capital for when CNP goes into a firesale (If it happens) and then MFS will accumulate cheap properties
but the market thought its to cover debt that they're hiding
MFS has now received a couple new offers. and now its in halt to address that as well as michael king's sacking/resignation
and also the quarterly report comes out on friday to address exactly how much debt they have and their profit projections
all in all i think im much more comfortable in MFS today than i was on friday
chicken8
21st-January-2008, 03:36 PM
Announcement out
Michael King resigned as CEO but voluntarily foregone the golden handshake. no financial payout was given to King for leaving his position
Craig White is the new CEO
justjohn
22nd-January-2008, 03:33 PM
Looks like the fun continues tomorrow when MFS comes out of it's trading halt:banghead: Bring it on.
rub92me
22nd-January-2008, 03:51 PM
Looks like the fun continues tomorrow when MFS comes out of it's trading halt:banghead: Bring it on.
Wouldn't count on that. Possibly a suspension if they have to consider a serious bid on the travel business?
chicken8
22nd-January-2008, 03:59 PM
if i was MFS i'd go into suspension and hide from this crash as long as possible
them when the waves clear. i come out rejecting all bids on the company and announce that the dividends have not changed and still will be whatever it was
chicken8
22nd-January-2008, 06:14 PM
MFS is ranked 5th in todays top performing stocks
GO YOU GOOD THING!
http://www.news.com.au/business/markets/movers/
Ken
22nd-January-2008, 10:31 PM
I am absolutely horrified of the amount people will lose tomorrow on this stock.
Those who placed bets on close will be terrified.
vida
23rd-January-2008, 12:36 AM
I bought this stock by accident. I had a buy order in one day far below the previous closing price and I was thinking of cancelling it then the stock dived and I found an email that evening advising my purchase. I was horrified then and it has only got worse since then and at least I only have 1,000 shares bought last week and wish I'd never heard of MFS. The news tonight is bad saying they may have to sell Stella at half its value to get urgent cash to save MFS from total ruin. At least it can be saved and may yet live to see a better day. Let us hope so and pray it works out in the long term. Anyway from what I can see on the market lately there is little good news anywhere.
I am absolutely horrified of the amount people will lose tomorrow on this stock.
Those who placed bets on close will be terrified.
Prospector
23rd-January-2008, 10:23 AM
There is an annnouncement saying it has been suspended, but NAB isnt working so cant find out anymore. Does it mean, kaput?:eek:
roland
23rd-January-2008, 10:26 AM
For further information please contact
SHARE REGISTRY
Investor Relations: 131 MFS (131 637) Computershare Investor Services Pty Ltd
E-mail: mail@mfsgroup.com.au Level 3, 60 Carrington Street
Website: www.mfsgroup.com.au Sydney NSW 2000
Telephone: 1300 787 650
ASX & MEDIA ANNOUNCEMENT
MFS LIMITED – SHAREHOLDER UPDATE
Ownership Review of the Stella Group
The Board of MFS Limited (MFS) has today requested that its securities be voluntarily
suspended from trading on the ASX.
As advised to the market on Monday 21 January, MFS had received unsolicited proposals from a
number of parties in relation to Stella. Since then further proposals have been received. The
proposals vary in nature and could involve the sale of a majority stake in Stella. The
consideration for each proposal is cash.
MFS is presently in detailed discussions with a preferred party interested in acquiring a
substantial interest in Stella. MFS is aiming to reach an agreement with either that party or an
alternate party within the next two weeks. The proceeds of any transaction would not only result
in full repayment of all short term maturing debt facilities, but strengthen the financial position of
MFS.
At this stage, the proposals received are conditional on limited further due diligence and
satisfaction of any necessary regulatory approvals.
Given the proposals received and the market reaction to aspects of the demerger proposal
announced on Friday 18 January, MFS has decided to not continue with the structural separation
of Stella from the financial services business in the form proposed.
MFS will continue to keep shareholders informed of any significant developments.
Debt Position
MFS wishes to clarify its debt position. A summary of the MFS group’s debt position is set out
below and in more detail as an appendix to this release.
MFS Group Debt Position – 31 December 2007
$ million Stella MFS (ex Stella) MFS Group
Asset backed facilities - 189 189
Secured term debt 905 150 1,055
Unsecured notes - 443 443
Total debt 905 782 1,687
Cash (102)1 (34) (136)1
Net debt 803 748 1,551
1. Excludes client cash of $48 million held in the travel services business
The vast majority of MFS’ existing debt is not required to be repaid or refinanced until after
31 December 2010:
MFS Group Debt Maturation Profile - 31 December 2007
$ million Stella MFS (ex Stella) MFS Group
< 3 months - 2202 2202
3 months – 1 year - - -
1 year - 3 years - 119 119
3 years – 5 years - 443 443
> 5 years 905 - 905
Total 905 782 1,687
2. Includes asset backed facilities totalling $65 million without a fixed term (primarily margin
loan facilities)
There has been no material change to the net debt position since 31 December 2007.
JeSSica WaBBit
23rd-January-2008, 10:25 PM
These guys are trying to dely the inevitable, not point hiding under the table..............hang onto your seats because i think they will get SMASHED when they come out of suspension!
I dont hold any but its got a very bad smell about it :eek7:
Best of luck to you game cowboys on this one.
sideshowbob
23rd-January-2008, 10:48 PM
Ive already conceded I will lose on this punt.
I threw $1000 at it for a pure gamble on close of .099 but they have made mince meat out of my dead cat since then... and I dont think there is going to be a bounce.... because the floor just disappeared.
:banghead::banghead::banghead:
Thankfully it was just pocket change.
I leave my life savings in the bank for now.
UPKA
23rd-January-2008, 10:48 PM
These guys are trying to dely the inevitable, not point hiding under the table..............hang onto your seats because i think they will get SMASHED when they come out of suspension!
I dont hold any but its got a very bad smell about it :eek7:
Best of luck to you game cowboys on this one.
any justification to ur opinion that MFS will "will get SMASHED when they come out of suspension"?
the company has came out confirming their debt position, in my opinion its a bit late, but none the less providing the market with a clearer picture of current company position. Its not all bad news... If CIY is willing to pay $1.3b for MFS Group - Stella, and is considered undervalued, i just cant see the current market cap - $500m staying at this level for very long...
vida
24th-January-2008, 12:47 AM
Is this true? Can MFS survive this ?
*************************************
Ailing MFS reveals its debt position is worse than first thought
Scott Rochfort, Sydney
January 24, 2008
GOLD Coast property group MFS has edged closer to oblivion after the company suspended its shares from trading and revealed its debt position is far more grave than what it reported only last Friday.
Just days after former chief executive Michael King played down the concerns about the company's $150 million short-term debt facility, MFS conceded yesterday it would need to use the partial sale of its Stella leisure business to settle the debt and recapitalise its balance sheet.
The company's new chief, Craig White, also confirmed the company was selling off its assets — including its 12% stake in the hedge fund HFA — in a desperate effort to repay its debts. It scooped up about $39 million for the stake, a fraction of what it would have been worth a month ago.
Mr White also said the company was still considering selling its stake in its listed property development trust, MFS Diversified Group, now worth a paltry $25 million.
"I certainly believe that once all the deals are done the company can survive," said Mr White, offering little comfort to shareholders who have seen shares in the group crumble more than 80% from their peak last year.
The company, at least, gave itself another two-week lifeline yesterday when it suspended its shares from trading, pending the possible sale of part of its Stella business to raise cash.
Shares in MFS are yet to trade since Friday, after they slumped 69% in reaction to the company's plans to raise $550 million.
But it is expected MFS shares will fall even further after the company revealed loans previously not disclosed, with its short-term debt facilities suddenly blowing out from $150 million to $220 million.
The group's $1.55 billion net debt position also included a previously undisclosed $65 million loan secured on its "listed investments".
But Mr White denied a report in the The Australian Financial Review that the US lender of the $150 million facility, Fortress, was calling in its loan. But he was later undermined when Commonwealth Bank rejected talk it would refinance the debt after it's March expiry.
Mr White also confirmed MFS was only looking to sell part of Stella and now had "immense interest" in the business.
With the previous bidder CVC the frontrunner, the share suspension will give MFS more time to allow other suitors to have a closer look at the business, which is Australia's second-largest hotel operator and largest travel agent. Its brands include Harvey World Travel and the Saville Hotel Group.
On Friday, the company said the fresh equity would be used to inject capital when it demerged its Stella hotel and travel business from its fund management business. But yesterday it all but confirmed the market's original suspicions, saying it would now need to sell part of Stella to pay off debts.
But when asked to comment on fears the distressed sale of its stake in HFA reflected the company's troubles, Mr White said people were "entitled to their opinion".
chicken8
24th-January-2008, 09:46 AM
I'm sick of the media and certain people on this board adding rumours and suspicion to MFS.
i believe the company is undervalued and im sure quite a few people share my view. i also believe that the media has contributed to MFS's freefall or at the very least prevented MFS from having a bounce with all the negative articles.
seems to me that the media thinks this is a nice story to tell and each will add their little bits of fuel to the fire. they want this to be the next CNP as it makes for a nice story and makes their readers feel good. as majority of the readers won't be in on MFS they'll be thinking "gee im glad im not in that sack of sh1t. im such a good trader"
people who don't even hold this stock will come join the thread and start adding their 2cents.
Pager
24th-January-2008, 10:38 AM
I'm sick of the media and certain people on this board adding rumours and suspicion to MFS.
i believe the company is undervalued and im sure quite a few people share my view. i also believe that the media has contributed to MFS's freefall or at the very least prevented MFS from having a bounce with all the negative articles.
seems to me that the media thinks this is a nice story to tell and each will add their little bits of fuel to the fire. they want this to be the next CNP as it makes for a nice story and makes their readers feel good. as majority of the readers won't be in on MFS they'll be thinking "gee im glad im not in that sack of sh1t. im such a good trader"
people who don't even hold this stock will come join the thread and start adding their 2cents.
I agree the Media are stirring the pot, not just MFS but a few others also, just ask any AFG shareholder, me included, end of the day there job is to sell there story and that very rarely involves the whole truth, just the juicy bits to sensationalize or create a story.
As to comments on boards like this, that's all they are, someone else's opinion and at the end of the day every post on every thread is just that, someone else's opinion, just like my reply :D
9krpm
24th-January-2008, 11:08 AM
I agree chicken8
I don't mind people adding their 2c but it's nice if they've considered some facts before dumping their load.
In the case of the media I'm pretty disgusted with the absolute lack of cogent thought that goes into most articles by the McJournalists who feed the ill feeling by subtle innuendo and poor assimilation of the facts.
If you try to "read through" the spotty and poorly reported information we get, I don't think the recent revelations have been all that bad news, it's just been spun that way by the media sheep.
I also feel on fundamentals they are way undervalued (their 2007 NTA per share was $6.29 fer pete's sake!) and when things shake out and less erratic market conditions return they've still got to have an NTA above a dollar.
That said, with the fear in the market at the moment I wouldn't be betting they won't fall any further in the short term. :confused:
JeSSica WaBBit
24th-January-2008, 07:52 PM
Well guys, if you think there isn't a problem at MFS then you have nothing to fear when the market opens. Why not put in a few buy orders and get more?
You can bang on all you like about the facts being this and the facts that, significant drop in share price is also a fact and the CEO had to resign, thats also a fact, theres lots of facts in fact. I am as entitled to post my opinion as much as you are.
Lets see what happens when they come out of suspension...........:)
chicken8
24th-January-2008, 09:13 PM
i agree chances are the stock will get dumped on opening. but im pretty sure fundamentals means the totally opposite of what happens in the short term
and from your few posts in this thread i'm already getting the feeling that you seek other people's misery for your own pleasure.
please come back into this thread when MFS opens and tell us how right you were. sore winner isn't a good trait amongst traders or anyone for that fact
vida
24th-January-2008, 10:55 PM
Well it doesn't matter if the stock gets dumped when it starts trading again, as long as the company keeps on doing business and keeps keeping on. In time the SP will reflect true value. In meantime, we are left wondering why such a long suspension from trading, is it possible they are insolvent and have no choice or is this just worse case scenario and reality is otherwise.
We can only wait and see. Oh well if I don't lose my money on MFS in long run then I am happy and if I lose it well then I will make it again elsewhere and a big lesson learnt through this experience I hope which will make me a wiser investor in future. I only lose equivalent of 5 weeks wages which is not nothing but its not everything.
I am not buying shares for a living but to invest in the future - so I have to sit back and let the future unfold and not worry. If we worry too much we should not be investing in the stockmarket as stress and anxiety can kill.
ME
i agree chances are the stock will get dumped on opening. but im pretty sure fundamentals means the totally opposite of what happens in the short term
and from your few posts in this thread i'm already getting the feeling that you seek other people's misery for your own pleasure.
please come back into this thread when MFS opens and tell us how right you were. sore winner isn't a good trait amongst traders or anyone for that fact
9krpm
24th-January-2008, 11:08 PM
You can bang on all you like about the facts being this and the facts that, significant drop in share price is also a fact and the CEO had to resign, thats also a fact, theres lots of facts in fact. I am as entitled to post my opinion as much as you are.
Please don't take things so personally JeSS, but those "facts" you rely on are pretty obvious to us all, and hence, while you are quite entitled to add your opinion, you haven't added much value to the thread, or our joint understanding of the MFS issue.
I guess I was hoping for some analysis of the facts, and perhaps some facts that aren't so obvious or well known that might add clarity.
I'm in no rush to buy, but if I had bought at 99c I be looking for a medium to long term gain - we'll see before too long, won't we? :eek:
I may be just a crazy optimist ;) but I think Centro will eventually rise too - both shares have been oversold to buggery because of market hysteria and lack of good analytical journalism IMHO.
JeSSica WaBBit
24th-January-2008, 11:17 PM
Lets see what happens when it comes off suspension guys and girls........................:) peace and out..............
roland
24th-January-2008, 11:23 PM
Lets see what happens when it comes off suspension guys and girls........................:) peace and out..............
Nice value adding to the MFS thread there :)
Volatility, good or bad is what traders look for, and I have a feeling that JeSSica Wabbit has either been bitten badly or just likes to stir up some sentiment.
In either case, please be gentle with us down and outers.
Nathan_b
25th-January-2008, 12:21 AM
or is a lurker getting their feet wet in market....
anyways, i dont hold but wanna buy some.
when will we see these guys trading again?
justjohn
25th-January-2008, 05:28 AM
or is a lurker getting their feet wet in market....
anyways, i dont hold but wanna buy some.
when will we see these guys trading again?
JW is more like a stalker getting off on other peoples pain and you dont have to be a brain surgeon to relise this stock for now is not in favour .As far as I'm concerned MFS isn't the only thing that smells. Come back when MFS is heading north or by then you might fine some other poor bastard to lay the boot into:arsch:
UPKA
25th-January-2008, 09:25 AM
JW is more like a stalker getting off on other peoples pain and you dont have to be a brain surgeon to relise this stock for now is not in favour .As far as I'm concerned MFS isn't the only thing that smells. Come back when MFS is heading north or by then you might fine some other poor bastard to lay the boot into:arsch:
There r ppl who take pleasure at other's losses, so they can feel better, kinda like someone who lost $5 comparing themselves with someone who lost $10... But whatever is going around on the market now is all rumours. Lets keep this thread informative, when you have something to inform us, please back it up with something solid.
vishalt
26th-January-2008, 12:54 AM
At our publication we only put hard facts and leave our story completely out of opinions but we do mention if the company denied to reveal its debt because that's what people want to know.
I think on one hand we should be thankful for the media putting immense pressure on companies to reveal their debt and get the truth out, which in MFS' case was the right thing as everyone discovered its debt surged from $150m to $220m.
On the other hand you do get the McJournalists desperate to write a story and shovel it up with their own opinions (I won't name the newspaper) or unsourced speculation which causes a firesale of assets in companies like Allco and has unjustly ruined the reputation of various companies.
vida
26th-January-2008, 10:03 AM
I don't know that it is true they denied to reveal its debt. All a person had to do was a little research, do some adding up and it was all there. The company may not have announced it directly to any journalists as it was happening and those journos failed to do their proper research but took the sensationalist road in their articles. There apparently was a lot of leveraged acquisitional spending over past six months which escalated the debt. Each acquisition would have been announced to shareholders and how it was being funded - we just have to check all the past announcements and do sums.
At our publication we only put hard facts and leave our story completely out of opinions but we do mention if the company denied to reveal its debt because that's what people want to know.
I think on one hand we should be thankful for the media putting immense pressure on companies to reveal their debt and get the truth out, which in MFS' case was the right thing as everyone discovered its debt surged from $150m to $220m.
On the other hand you do get the McJournalists desperate to write a story and shovel it up with their own opinions (I won't name the newspaper) or unsourced speculation which causes a firesale of assets in companies like Allco and has unjustly ruined the reputation of various companies.
robert toms
26th-January-2008, 04:14 PM
I am a holder or both MFS and MPY,that is a disclaimer.
If the article in AFR today on Mfs,its pricipals etc,has any veracity ...the company is in dire straits.The authors claim that the staff are devasated already .
There was no risk management strategy with MFS it seems.
If the company comes out of suspension and trades again it will be unexpected bonus.
They paint a damning picture of King and Adams,virtually a return of the Queensland white shoe brigade....pity the journalists were not wise before the event?
tigerboi
26th-January-2008, 05:01 PM
i am not a subscriber but if there is any afr subscibers online maybe they
could post it for all mfs holders to read,white shoe brigade is about right.
offering high yields with others money,people are still falling for it,were was
king& adams when the 5hit hit the fan???playing polo in europe,until asic &
others start getting fair dinkum this will keep happening,remember this. how
many more of these cnp,mfs are on the brink???reckon there is a lot of bum
covering going on,off market trades to the wife,etc etc,big houses to the
wife & kids then it goes crash bang wallop*&^%$#@! me sir iam broke i am
relying on the good charity of friends to put me up for the night,its a joke
that has to be fixed for good.....tb
Kauri
26th-January-2008, 07:00 PM
Some of the best investment advice I ever got.. from my old father... check the company pedigree and if there is a Q anywhere in its address be carefull.. be very very carefull :)
Cheers
........Kauri
discman
28th-January-2008, 03:02 PM
There are lots of rumours surrounding MFS. So let’s focus on the fact and work it out.
Share price:
The share price for MFS was around $4.50 at the beginning of the year.
Share price dropped to $3.55 on 11 Jan due to Centro proposal, (and director received margin call to dump 500,000 shares)
Share price dropped to $0.99 on 18 Jan due to Stella and Financial Services de-merger proposal with $550 recapitalising.
The rapid share price drop on 18 Jan was caused by chain reaction:
First hedge funds and shorters were shorting the stock since CNP disaster.
Then sensitive Investors started to dump the shares when de-merger proposal announced.
The low share price triggered the margin call again, so you got millions of shares were forced to sell in just couple of hours by the margin lenders (including the director’s).
Plus the computer at Barcalys – (one of MFS major shareholders) was issuing sell signal. Some of you may not know, Barcalys runs quant-style funds – that is, with a computer rather than a human deciding when to buy and sell. In result, 10.5 million MFS shares were sold (that is 2.18% of the company).
Then follow by small investors, who were scared, and joined the selling force. At the end of the day, the share price closed at $0.99, that is 69% down in single day.
Large shareholder trades:
Former Director Michael Hiscock sold his 500,000 share due to margin call on 11 Jan, (he still hold around 4.5 million shares after resignation)
Merrill Lynch acquired a net 6,447,373 MFS shares between January 9 and 15, increasing from 35,109,585 shares (7.26%) to 41,556,957 shares (8.59%).
Director Paul Manka sold all his 5 million shares due to margin call on 18 Jan.
Barcalys sold 10.5 million shares on 18 Jan (reason explained about)
Former company's CEO Mr King is still the third-largest shareholder and hold over 32 million (6.85%) MFS shares (As far as I know, he only sold half million shares at the beginning of the year.)
Total Debt position: (correct me if I am wrong)
On MFS 2007 annual report page 43 and page 53, it stated the company total debt was $2.2 Billion. To my understanding, the debt related to Stella was placed in current liability as “liability classified as held for sale” in the report, (see in section “Stella – discontinued”, page 51). So compare to the announcement on 23 Jan, it’s in better position (in term of debt) compared to six months ago. However, most of the media reports said "debt blow out of control" and "debt had nearly quadrupled”, looks like they only consider the “Non-current liabilities” as total debt for the company at that time, I wish the media could provide detail explanation to support their side of the story.
Company Value
MFS’s business excluding the Stella was valued at 1.33 billions at the time when CIY offered merge proposal.
Nobody knows the exact value of Stella, the only thing we know is Stella has lots of quality assets and it was making over $100M EBITDA in last 6 months.
Short Term debt and Cash:
The company need to refinance or repay $220M ($150M Fortress loan + other $65M primarily margin loan facilities without a fixed term) by March. It has $136M cash (Excludes client cash of $48 million held in the travel services business).
Here is my opinion:
CIY must had details study on MFS before they came up the proposal, the valuation was considered undervalued by other financial analysts, as usual, if you are the buyer, you want to pay less, especially in this market condition. Although CIY had withdraw the proposal at the end, but the fundamental value of the company shouldn’t change in just couple days. I can understand the reason behind the withdraw, in fact no one on earth will dire to go ahead after you just saw your target company share price drop 69%. So the valuation is quite correct.
Some articles said: “the company revealed loans previously not disclosed, its short-term debt facilities suddenly blowing out from $150 million to $220 million”. It depends on you how to classify the $65 million margin loan facilities. Some of you may have non fixed term margin loans, and then you know they could be as long term as you willing to pay the interests, of course, if you never meet the margin call. Unfortunately the shares market dropped dramatically this month, so the margin loans suddenly had to be covered in this case. I think the margin loan facilities are some how associated with the investments in HFA, BBC & MFT shares, as the company was reported that, it just sold $43.5 million worth of HFA, BBC & MFT shares due to margin call in last couple of days.
After commonwealth bank rejected the $150 million refinance (assume this is the last source), MFS has to sell off partial Stella to cover all the short-term debt, so let’s work it out. You have $220 million debt, on the other hand, you have $136 million cash + another $43.5 million cash from selling of HFA, BBC & MFT shares. Then you don’t need to sell much of the Stella assets to cover the rest, I believe any sells will be in discount price, but can’t really see it’s a fire-sell situation.
In the past, I had seen many large companies went under after their share price crashed, but also seen many of them returned back even stronger. They all seem to share a common rule – profitability.
MFS is profitable company and marking reliable income cash flow, at lesase, this one is commonly agreed so far.
After sperate the fact and rumours
Is MFS really as bad as the media says?
Will the company change its fundamental value after reply the remaining (debt - cash) short term debt?
Is MFS worth less than half billion $ market cap?
That is up to you to decide ….
:)
Prospector
28th-January-2008, 03:13 PM
MFS share price has been dropping consistently since mid December,(December 17 - $5.14) before any Centro announcement - why was that? :mad:
discman
28th-January-2008, 04:27 PM
MFS share price has been dropping consistently since mid December,(December 17 - $5.14) before any Centro announcement - why was that? :mad:
Mid December was around the peek time for the market, S&P/ASX 200 and AORD were above 6500 then, after that the whole market slowing down, and investors started move away from high leverage company due to sub-prime concern. MFS, BXB, AMP, AFG etc … are just among them.
Honestly, I don’t think MFS share will bounce back to $5 in short term, I feel sorry for you or someone bought the share around that price.
But for around $1 PS, it is a bargain. :)
9krpm
29th-January-2008, 11:46 AM
Thankyou Discman for some ANALYSIS instead of mere speculation - it's much appreciated.
I think you're right, and it's the ability to do quality analysis (sadly, the press seem incapable of this, but perhaps that's to our advantage ;) ) that makes the difference between making a sound trading/investment decision and just being one of the sheep. :rolleyes:
|guanA
29th-January-2008, 12:21 PM
I bought MFS at $1.285 a week or so ago, thanks Discman, your post brings a little relief, the past week has been tough to ride out, and I'm sure its going be hell when they're out of suspension, reading your post makes me just a little bit more confident on my purchase. Fingers crossed.
rgdk
29th-January-2008, 01:42 PM
Thanks also Discman for your summary post. I had considered doing the same also as I have been digging like sh$t to uncover as much information as possible to try to separate the hype from the facts.
I think that your assessment of the status quo is pretty much spot on from what I have read with respect to the numbers as well as with respect to the scurrolous way that the media report them. If we are to believe them then the company is 'on the brink of collapse' or 'doomed'. Yet only around 10% of their debt is up for immediate renewal, something relatively simple to address with the part-sale of Stella.
Furthermore, little analysis is presented with respect to the ongoing profitability of the businesses, which up until recently, were affirmed at EPS of 40 c + and projected to grow. Clearly this will have to be revised downwards on sale of assets, but nothing has been released that i am aware of that indicates that the business cannot actually meet interest cover. The main issue has been, as with Centro, the inability to refinance the $150 million Fortress Facility Loan.
The irony has been that this facility was due for payment in March, but with the share price collapse, a clause in the lending contract has been triggered demanding immediate closure of the debt position. So whilst there was not originally a problem, the ill-timed rights issue, probably aimed at providing the company some financial contingency in the event of future liquidity issues, has actually caused an immediate one. I would guess that this is what has precipitated the recent selling by MFS of its stakes in BBC and HFA.
All I can say is that when the announcement comes of what is happening next, for me and I expect everyone else in the market, the company would be completely irresponsible to not provide a crystal clear picture of:
1) Its debt position and working capital going forward
2) Its ongoing earnings projections
3) Its viability as a going concern
Only then I think will we see some stability in the share price. From what I can see at present, provided that the company can address its immediate debts, its actual business is not performing poorly.
As a final note, I did read that UBS had revised their share price target down from around $6.00 down to $1.59, indicating that they too are treating the forecasters of complete oblivion with some scepticism. Although of course a month ago they were saying MFS was worth $6.00...
Lets all keep posting useful FACTUAL information as it comes to light...
robert toms
30th-January-2008, 08:52 AM
Facts are being revealed all the time about MFS...not new facts,but facts not previously revealed.
Expect nothing and you will not be disappointed !
Prospector
30th-January-2008, 09:03 AM
Facts are being revealed all the time about MFS...not new facts,but facts not previously revealed.
Expect nothing and you will not be disappointed !
A fact not revealed is withholding information. In the Insurance Business, witholding information that could increase the risk of the underwriters of the Policy, automatically invalidates the Policy. It is the same with business. if you are saying there are facts, (even if not new) that contribute to the risk of the business, that are only now being revealed to the market, then they have misled the market. If those facts decrease the risk of the business, then they don't have to reveal them.
So, do these (newly revealed) facts increase or decrease the risk of the business?
CranG
30th-January-2008, 09:04 AM
...The main issue has been, as with Centro, the inability to refinance the $150 million Fortress Facility Loan.
The irony has been that this facility was due for payment in March, but with the share price collapse, a clause in the lending contract has been triggered demanding immediate closure of the debt position.....
rgdk, agree with you completely. However, there is a correction to be made
This is a quite from DJ News Wires
The spokesman also denied some media reports that a A$150 million loan from U.S. hedge fund Fortress Investment Group was on immediate demand, saying the debt is due by the end of March.
"In regards to anything that would trigger an immediate repayment, there hasn't been a breach of that," he said.
Unfortunately, some false information is assumed to be fact; and furthermore folks have been arguing around false information. I've noticed that Reuters and Bloomberg aren't quoting AFR as much, and if they do they will now state that AFR did not mention the source of the information.
AFR have lost credibility in my books. I'll get a second opinion on any of their stories from now on.
robert toms
30th-January-2008, 11:24 AM
I can see that we have some true believers here.
Not to do with facts,but as you may have learned that MFS have stopped redemptions from their Premium Income Fund for 180 days.
I fear that the MFS brand is damaged beyond repair...Who is going to invest with them?
I had 10K with that fund two years ago,but after the dishonest treatment that I received with the HFA float I withdrew that as soon as I was able.
I also covered myself with a sale of some of my shares in MFS.
I never recommended MFS to anyone as I did not completely trust them myself.
However I made the mistake of keeping some because they appeared successful,whatever my personal view of them was.'I was /am a fool Oh Yeah aha'
I sent an email to MPY asking them why they were suspended from trading,but no reply as yet...I thought that they were a stand alone entity on the ASX...but who knows what will be revealed ?
As I said before I am pessimistic in these situations and if you expect nothing you will not be disappointed.
I got into these thru the Breadfree takeover.
Prospector
30th-January-2008, 12:15 PM
So MFS is now suspended for six months. This was on the Television - is it true? Ditto - I got into MFS through Breakfree too, unfortunately.....
robert toms
30th-January-2008, 04:42 PM
They,MFS,stopped redemptions on their flagship Premium Income Fund.
That fund had a minimum investment of 5k...and it is said that some wholesale investors had over $300k.
There was a rush for redemptions...some terms were for a little as three months....and MFS suspended all redemptions for 180 days.Not confidence inspiring to say the least.
I think that the fund had somewhere around 700 million in it.
MFS itself itself is not subject to the 180 days,but....
That was on the News site this morning.
rgdk
1st-February-2008, 02:10 PM
More news filtering out, but predictably the journos have no idea what they are saying with contradictions in fact. I can't believe they are allowed to put out some of this garbage...
From the Courier Mail:
Sources said yesterday the two leading private equity players had each offered more than $1.8 billion for a half share in the group, which includes BreakFree resorts, Peppers hotels and Harvey World Travel.
Both offers are superior to the $1.6 billion CVC Asia Pacific is understood to have put up and had rejected as too low, since MFS had cobbled together the assets over time at a cost of about $1.9 billion.
Ironically, CVC is believed to have been willing to pay $2.2 billion last year but that offer too was knocked back because MFS valued the group then at $2.4 billion, sources said.
Ummm, does MFS value the half share or the entire business at 2.4 billion? 2.4 billion is the correct figure for the whole business. So then 1.8 billion for a half share sounds f%^$ing amazing!! Get the bloody facts right! One can assume that they are looking at 0.9 billion for the half share. Assuming this is right, then that is not too bad given the earlier expectations of its fire sale valuation - see later.
But just to show that the Courier Mail is just being true to form:
As thousands of nervous investors watch from the sidelines, MFS announced yesterday that it had made a paltry $43.5 million profit on the sale of its stake in an aged care company.
MFS – an investment group which owns the BreakFree Hotel chain and Harvey World Travel – is struggling to erase a $1.7 billion debt stemming from the global credit crunch, including $220 million payable within three months. Courier Mail
Ummm, has the 1.7 billion debt stemmed from the credit crunch? Gee I thought it actually came from buying assets over the past few years... And are they struggling to erase the 1.7 billion debt? No, just a portion of it.
This is an earlier comment regarding the expectations of the Stella sale from the Australian:
But in light of MFS' recent troubles, it is likely the company is less fussy about getting the $900 million it originally wanted for a half share of the business in November.
There is talk MFS will struggle to get even half that price, with its adviser UBS' broking arm already putting a "distressed valuation" of $712 million on the entire Stella business minus debt.
So in the light of the above, getting 900 million would be a positive.
Of course that appears to only be part of the problem now as there has been so much mud slinging at the MFS brand that the value of the funds management business would be severely affected. Not to mention the self fulfilling prophetic effect of the media reporting causing a run on MFS's funds resulting in real distress for the company - hence the 180 day freeze.
So, current assessment is both good and bad, but the real litmus test will be the company's transparency, disclosure and outlook going forward. I think I would be really happy to get $1.50 back in the shorter term....
Prospector
1st-February-2008, 05:12 PM
It seems the worst issue facing MFS is its total loss of reputation. And for a company like this, reputation is everything. Speculation maybe, but it is facing a fire sale, and past valuations are really quite as the vultures come in for the spoil.
Today an Advisor (didnt catch the name) said that Centro would survive, MFS would not. What a fall from grace. :banghead:
MFS Pacific Finance has defaulted on interest payments to some of its 12,000 New Zealand investors after its parent company in Queensland refused to continue support.
New Zealanders have $NZ325 million ($A286.52 million) invested in MFS Pacific Finance Ltd, and the Australian company has said it will not (not) provide further financial support.
MFS Pacific is the 14th significant finance company to fail or default on repayments in under two years means and it raises to nearly $2 billion the amount of funds affected, although some of this has since been repaid by the receivers of some of the companies.
A financially-troubled Gold Coast tourism and funds management group, MFS Ltd, controls the NZ operation through a 38.5 percent stake in MFS New Zealand, which holds MFS Pacific as a wholly owned debenture finance company.
more......
robert toms
2nd-February-2008, 06:52 AM
I saw an old golf clip on the news with the MFS logo prominent...happier days.
Yes the name is tarnished,beyond redemption, and their funds management business,I believe,is kaput.
The only hope,and I believe a slim hope, is for them to have some assets left over from the fire-sale of Stella etc. Then a severely diminished MFS can trade with a very low capitalisation.
However,I am not holding out any hope.
I hope that MFS has not brought down MPY with it,but I am not confident.
There seems to have been an incestuous relationship between MFS and MPY...and it makes me wonder what the motiviation was in floating these assets.
I did not,of course, receive any answer to my query as to why MPY went into a trading halt at the same time as MFS.
Weeks ago they announced a 12 cent a share dividend for the next year($21million cost)and then shortly after announced a cash for equity dealy with a financier...$29 million raised.
Polo Phil was on the MPY board then,but has since resigned.
Prospector
2nd-February-2008, 09:33 AM
MFS are currently sponsoring a women's event in Australia at the moment. So yes, the MFS was prominently displayed on the TV yesterday. Maybe they should have paid more attention to their key business strategies.
roland
4th-February-2008, 09:53 AM
News Release
ASX & MEDIA ANNOUNCEMENT
Sale of 65% of Stella Group
MFS Limited (ASX: MFS) announced today that it had entered into binding
agreements in relation to the sale of a 65% shareholding in the Stella Group
(“Stella”) to funds advised by CVC Asia Pacific (“CVC”).
Stella is a leading hospitality and travel group with significant operations in
Australia, New Zealand, South Africa and the UK. The introduction of CVC as a
majority shareholder in Stella will significantly enhance its position to pursue
expansion plans in Australia and internationally.
Key features of the transaction are:
MFS will receive cash proceeds of just over $409 million and will retain a 35%
shareholding and economic interest in Stella
MFS will equity account its interest in Stella following completion and will no
longer consolidate approximately $905 million of Stella debt
The transaction is subject to receipt of foreign regulatory approvals in
Australia (FIRB) and New Zealand (OIO). CVC has lodged applications with
each of these regulatory bodies and expects to receive approval by the end of
March 2008
The transaction is not subject to shareholder approval
Rolf Krecklenberg will remain as Managing Director of Stella Group and will
step down from the MFS Board on completion of the transaction
MFS is entitled to seek a priority allocation for MFS shareholders in any public
listing of Stella should Stella seek a separate listing on a stock exchange in
the future
The Chairman of MFS, the Hon Andrew Peacock, said: “CVC is an excellent
partner for Stella and one we believe can make a significant contribution to its
future and maximise its value over the medium term. The proceeds from the
transaction will enable MFS to repay its short term debt obligations and at the
same time provide it with the flexibility to manage its commitments into the future.
MFS will retain a 35% interest in Stella so MFS shareholders will continue to
benefit from Stella’s expansion and growth.
CVC Asia Pacific Managing Director, Ben Keeble, said that CVC was delighted to
be taking a controlling interest in the Stella Group.
“Stella is a unique business in this market led by a high quality management
team. We look forward to working with Rolf Krecklenberg and his team to
continue to grow the Stella brands in Australia and overseas for the benefit of all
stakeholders in the Company,” Mr Keeble said.
Mr Rolf Krecklenberg, Managing Director of Stella, said: “CVC is an experienced
investor with a shared vision for Stella. We look forward to working with CVC to
continue Stella’s development as a major player in hospitality and travel.”
The MFS Board recognised that MFS was not a natural long term owner of Stella
and that separation of ownership offered significant benefits to both MFS and
Stella. A separation would allow Stella to operate independently from MFS and
to pursue its own growth objectives without being constrained by MFS
ownership.
One of the MFS Board’s key objectives was to complete the ownership review of
Stella in an expeditious manner in order to restore stability to the group and its
businesses. During this period the company received proposals from a number
of parties. The CVC proposal was considered to be superior having regard to a
number of factors including value, certainty, timing and ability to contribute to the
future growth of Stella.
MFS Strategic Review
MFS has retained external advisers to assist it undertake and complete a
strategic review of its financial services business, including a review of its
operating and financing structure. Until the strategic review is completed, the
board of MFS has requested ASX to continue the voluntary suspension of MFS
securities.
Contact: John Hurst, MFS Limited
Phone: 02 8259 7257
chicken8
4th-February-2008, 10:40 AM
i think this was a fairly good deal
obviously not as good a deal as they would like but definately not the fire sale that the media makes it out to be
and by retaining 35% of stella they can maintain a steady flow of profits to the company and its shareholders
The Mint Man
4th-February-2008, 10:59 AM
i think this was a fairly good deal
obviously not as good a deal as they would like but definately not the fire sale that the media makes it out to be
and by retaining 35% of stella they can maintain a steady flow of profits to the company and its shareholders
I agree, I am quite surprised that it went for this much. Plus as you pointed out MFS will still retain 35% which will provide good sideline profits into the future.
Just to back up my argument, back on the 14/01/2008 MFS and City Pacific announced a proposed merger, excluding Stella. The proposal involved the issue of 225m CIY shares at $3.70 ($833m). The market capitalisation of MFS based on the previous close of $3.55 was $1.72bn. So Stella (the travel business) was effectively valued at $887m.
So, to sell just 65% of Stella for $409 million in this climate..... seems like a good deal for MFS to me!!
Cheers:D
chicken8
4th-February-2008, 11:06 AM
another thing to take note is the 900m debt consolidation
so effectively MFS go from 1.7bill or so of debt down to 800mill
another 220mill due which they'll pay off with their newly acquired 409mill of cash
so they go down to around 550mill of debt or so
with 100mill profit coming in from Stella's 35% that debt will be gone soon
seems good to me. can others chime in?
chicken8
4th-February-2008, 11:16 AM
I agree, I am quite surprised that it went for this much. Plus as you pointed out MFS will still retain 35% which will provide good sideline profits into the future.
Just to back up my argument, back on the 14/01/2008 MFS and City Pacific announced a proposed merger, excluding Stella. The proposal involved the issue of 225m CIY shares at $3.70 ($833m). The market capitalisation of MFS based on the previous close of $3.55 was $1.72bn. So Stella (the travel business) was effectively valued at $887m.
So, to sell just 65% of Stella for $409 million in this climate..... seems like a good deal for MFS to me!!
Cheers:D
another thing is. all the debt got covered. not 65% of debt. (correct me if im wrong)
so the current transaction was 409mill + 906mill = 1315mill for 65%
previously value of 887mill + 906mill = 1793 = 100%
UPKA
4th-February-2008, 02:42 PM
another thing is. all the debt got covered. not 65% of debt. (correct me if im wrong)
so the current transaction was 409mill + 906mill = 1315mill for 65%
previously value of 887mill + 906mill = 1793 = 100%
indeed,much better deal than wat I have expected. im still puzzled why MFS sold out alot of its various other assets... after the short term debt is paid off, it should have around 300m spare in cash (very very rough figure). r they using the money for aquisition of some of CNP's property trusts? hopefully they get some good deals here to cover their losses...
vida
4th-February-2008, 05:35 PM
Sounds very good to me too :-) I think MFS will come through, they may have over burdened themselves with debt but not without asset to back them up so all will be well. THey are highly geared but that is the name of their game, after all they do call themslves MFS Leveraged Investments etc.. i trust in their abilities to keep going and we will survive to see better days.
discman
13th-February-2008, 01:23 PM
Looks like some big sharesholders are not happy with the Stella sale.
http://www.news.com.au/couriermail/story/0,23739,23204286-3122,00.html
Honestly, When the entire MFS has only $500 M market cap, so Stella was actually valued 3 times more than the entire MFS in the deal. And MFS can get $400 M cash, hold 35% of Stella and remove $900 M debt from the balance sheet.
I know it was undervalued compare to half year ago, but in today market condition, in this critical time to the company, the deal is not bad at all.
I just hope the large shareholders won’t damage the company further. After all company and shareholders are on the same boat.
robert toms
13th-February-2008, 04:27 PM
Read the article,and one thing that I believe that Scott is right about is that the board members should fall on their sword.Anyone that oversaw the MFS business plan and missed the dangers that the subprime crisis posed to heavily leveraged companies like MFS and MPY should pull the pin....their credibility is shot.They get paid to be more competent than us punters.
Investors rely on their ability.I see that the MFS compliance and risk manager resigned for personal reasons...not a moment too soon.
The Mint Man
13th-February-2008, 05:13 PM
Some of the claims in that article are very interesting and I imagine would be news to most MFS stock holders. So having said that I think it is worthwhile posting it up here;
By Anthony Marx
February 11, 2008 11:00pm
MFS board under fire
THE biggest individual shareholder in struggling MFS has accused the board of selling off its largest asset far too cheaply and is demanding that investors get a chance to vote on the deal.
Chris Scott, who controls an 8.4 per cent stake in the Gold Coast funds manager, filed a complaint with the Australian Securities Exchange this week alleging MFS' planned sale of two-thirds of its Stella hotel and travel group violated listing rules as shareholders had no say.
MFS announced last week that it had struck a $1.3 billion deal with private equity group CVC Asia Pacific and would not need shareholder approval.
But Mr Scott alleges the sale undervalues Stella, which MFS had valued at up to $2.8 billion last year, by $500 million to $800 million.
Stella, which includes the BreakFree hotel chain, Peppers resorts and Harvey World Travel stores, generates 95 per cent of revenues and 55 per cent of pre-tax earnings for MFS. Chapter 11 of the ASX listing rules requires that if a significant change "involves the entity disposing of its main undertaking, the entity must get the approval of holders of its ordinary securities".
Mr Scott, who sold his S8 tourism group to MFS in 2006 and owns 42 million shares, attacked the board for overseeing an "outrageous" fire sale.
"Clearly, the shareholders are getting raped on this issue. There's no doubt about that. Everyone accepts they sold it too cheap. They only sold it for one reason – to solve a temporary cash flow problem," he said from Singapore yesterday.
As a result, Mr Scott has called for most of the board to resign. He and two associates want to join a revitalised board, raise about $250 million to alleviate debt pressure and proceed with an orderly sale of assets.
After MFS failed last month to borrow $550 million to restructure the company, the share price plunged and the stock remains in a trading halt. MFS is saddled with $220 million in short-term debt and has frozen investor redemptions in its $770 million Premium Income Fund.
"Here's a board that cannot go to the market and raise capital because it has no credibility and so what they do is sell off an asset cheap and rape the shareholders. Now the board ought to fall on its sword. This is not the way public companies are supposed to work," Mr Scott said.
He also alleged that Rolf Krecklenberg, managing director of Stella and an MFS board member, had struck a deal to receive equity in CVC but no details had been released to the market. He said former MFS chief executive Michael King, current chief executive Craig White and accountant Mark Korda had all separately confirmed the deal. Mr Krecklenberg was not involved in board deliberations about Stella.
"Rolf has a vested interest in the Stella deal going ahead with CVC," Mr Scott said.
Mr Krecklenberg declined to comment yesterday, while Mr White and Mr King did not return calls. An MFS spokesman said he was unaware of any arrangement for Mr Krecklenberg to secure CVC equity.
The MFS spokesman also said the ASX had provided a waiver allowing the Stella sale to proceed without input from shareholders. But sources contradicted that statement and a on-line review of the ASX waiver register did not show any listing for MFS.
ASX chief supervision officer Eric Mayne would not comment about the Stella sale.
Cheers:D
