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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
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
