MFS - MFS Limited

[pacer]

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]

Lovely little dividend cheque the other day - 20cents a share fully franked! At the current share price, MFS really is very sweet!

 

[smoothsatin]

Agreed P, at this rate t wont be long until the divs are = to what i paid for my shares!

 

[michael_selway]

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]

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]

Yup, fully franked.

Oh, and it was direct deposited too, it just doesn't sound as sexy as a cheque in the mail :

 

[Ken]

whats the 12 month target price for MFS?

 

[michael_selway]

whats the 12 month target price for MFS?

$5+ sounds reasonable to me

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 42.6 31.7 40.4 49.3
DPS 29.5 19.0 25.0 30.0

thx

MS

 

[smoothsatin]

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]

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]

Re: MFS & SEL Merger

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]

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]

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]

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]

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]

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]

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]

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 ( 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]

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! More fees!! Yes pleeease!

I'm now looking forward to the next guidance announcement to the market - should be soon.

 

[scsl]

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.