Listed funds management business MFS has backflipped over its decision to separate its Stella tourism group from its financial services business.
Less than a week after the company announced it would divide the two groups, the decision has now been ditched in favour of selling off a majority stake in Stella.
In a statement to the Australian Securities Exchange, the board of MFS requested that its securities be voluntarily suspended from trading as it had received unsolicited proposals from a number of parties.
“MFS is presently in detailed discussions with a preferred party interested in acquiring a substantial interest in Stella,” the statement said.
“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.”
The proposals were conditional on limited further due diligence and satisfaction of any necessary regulatory approvals, the statement said.
“Given the proposals received and the market reaction to aspects of the demerger proposal announced on Friday 18 January, MFS has decided not to continue with the structural separation of Stella from the financial services business in the form proposed.”
The future of MFS’ financial services business is unknown. Calls to the company were not returned by InvestorDaily’s deadline.
Earlier this week, MFS chief executive Michael King resigned.
King left following a slump in the company’s share price on January 18 and the withdrawal of a merger offer from Brisbane-based asset manager City Pacific.
Deputy chief executive Craig White was immediately appointed MFS’ new chief executive following King’s resignation.
