MFS Group announces merger plans
By Michael Bailey
Boutique fund manager MFS Group is to join forces with Gold Coast-based holiday accommodation group, Breakfree, to create a diversified property group with a market cap of $385 million.
MFS became a listed entity earlier this month after merging with a publicly floated investment trust the company already owned, and was granted a trading halt on its stock last week by the Australian Stock Exchange ahead of the announcement.
The company, which runs the Premium Income Mortgage Fund, will now merge with Breakfee following support for the deal from all the major founding shareholders of both MFS and Breakfree.
The deal will combine MFS’ development pipeline with Breakfree’s hotel room management capabilities, and aim to meet Breakfree’s target of having 10,000 rooms under management by 2008-09.
It currently has management rights for approximately 3,400 rooms.
MFS has flagged that Breakfree’s business could form the basis for new financial products, such as holiday bonds.
Breakfree shareholders will be offered three new MFS shares for each Breakfree share held, under a proposal to be sent to them on February 15.
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