MFS talks to bidders

Trading in the shares of diversified financial services group MFS Limited remain in voluntary suspension on the Australian Stock Exchange today as the company seeks to determine a direction to move beyond the aborted strategy that would have separated its financial services and hospitality divisions.

The company late yesterday issued an announcement to the Australian Stock Exchange in which it said it had received unsolicited proposals from a number of parties in relation to the acquisition of its Stella hospital group.

It said MFS was in detailed discussions with a preferred party interested in acquiring a substantial interest in Stella, with MFS aiming to reach agreement with either that party or an alternate party within the next two weeks.

The company’s announcement came at the same time as the Commonwealth Bank moved to scotch media reports that it would pay one of MFS’ debt facilities.

In an announcement issued on the ASX, the Commonwealth Bank said the report that it would repay the Fortress debt facility was incorrect.

“The Commonwealth Bank of Australia has not agreed to refinance this or any other MFS debt facility,” the ASX announcement said.

For its part, MFS Limited used its ASX announcement to detail its debt position and to point out that “the vast majority of MFS’ existing debt is not required to be repaid or refinanced until after 31 December, 2010”.

In what has represented a tumultuous week for the Gold Coast-based company, MFS has seen trading in its shares suspended twice and the departure of its chairman, Michael King.