MFS - MFS Limited

[Hephaestus]

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]

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]

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 They have some news that is ment to come out soon I believe... but its taking its damn time!! gotta go

Cheers

Edit: merger proposal with CIY

 

[Dukey]

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]

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

 

[Prospector]

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.:

 

[UPKA]

Michael Hiscock non-exe director was forced to sell 500,000 shares due to margin call.

http://www.theaustralian.news.com.au/story/0,25197,23048982-5013408,00.html

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]

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]

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

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 53.1 45.3 56.0 65.7
DPS 28.0 34.0 34.0 42.0

thx

MS

 

[The Mint Man]

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. 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

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]

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

 

[rgdk]

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

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]

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]

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
It does not mention CIY anywhere in that ann, is it possible other players are interested?

Cheers

 

[Hephaestus]

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]

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]

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]

Maquarie rates this stock at 7.15 as of yesterday....

......................................................................................................................

 

[michael_selway]

Maquarie rates this stock at 7.15 as of yesterday....

......................................................................................................................

Maybe they hold alot of it!

......................................................................................................................

thx

MS

 

[The Mint Man]

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?"

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.

Cheers