Embattled asset management group MFS has lost its head with the resignation of boss Michael King yesterday.
The group's chief executive left following a slump in the company's share price on January 18 and news yesterday that Brisbane-based asset manager City Pacific had withdrawn its offer to merge with MFS.
Deputy chief executive Craig White was immediately appointed MFS' new chief executive following King's resignation.
King will not receive a payout as he has voluntarily given up his right to be paid compensation and entitlements under his service agreement.
MFS' share price fell 69 per cent on January 18 and has lost $2.8 billion in market value since reaching a record high on May 21. The shares are currently in a trading halt.
On January 14 City Pacific proposed to buy the MFS financial services business in a deal with an enterprise value of about $1.33 billion, through the issue of 225 million City Pacific shares at $3.70 a share and the assumption of $500 million in debt.
An analyst's report from UBS had highlighted that the proposed separation of its tourism and funds management business could seriously damage the later.
"Following the announcement of a proposed separation of the MFS funds management business and 100 per cent owned Stella travel, the precipitous fall in the MFS share price now poses serious risks to the MFS retail funds management business in our view," UBS analyst Lachlan Parker said.
"The bulk of the funds under management within MFS' funds management business, that is exposed to retail investors, will very likely see accelerated redemptions in our view."
Australia's biggest travel agency Flight Centre announced to the Australian Securities Exchange that it was unlikely to buy any assets from MFS.
Fund manager HFA, who spun out from MFS in 2006, also reiterated it has no operating or business relationship with MFS or any of its entities following around an 11 per cent fall in the HFA share price.
