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MFS New Zealand says it remains committed to putting together a proposal for Vestar investors who lost money in failed finance companies amid uncertainty over the future of the company as its major shareholder faces a takeover bid.
Australian listed company MFS, which owns 38.5 per cent of the New Zealand company, was yesterday placed in a trading halt pending a decision on the separation of its travel arm, the Stella Group, following an offer from City Pacific to buy the fund management side of the business.
MFS New Zealand CEO Jason Maywald said the New Zealand company had been working on a proposal for the past couple of months and was still hoping to have it together in the early part of this year.
"We are trying to get it out to clients as soon as possible but there are lots of legal matters to deal with. However, we remain committed."
Maywald said he could not give any further details on the proposal.
Vestar investors received a letter from MFS New Zealand in December informing them of "MFS' commitment to ensure that Vestar's clients do not suffer any capital loss in relation to the receivership of Capital + Merchant". But it did not say what the commitment would entail.
Vestar, a financial advice firm wholly owned by MFS, was due to be sold to MFS New Zealand at the end of last year but the deal has been put off until September.
The company has faced the ire of angry investors over the past six months following the failure of Bridgecorp and Capital + Merchant.
Maywald said it was too soon to say what the City Pacific proposal meant for the New Zealand business.
"It's just a proposal at this stage - the only details available are what has been released to the market - so really it's a little bit premature to speculate what that could mean for MFS or any of its underlying business including MFS New Zealand."
MFS received the bid from City Pacific on Monday. City has offered to buy most of MFS' funds management business in a deal worth about A$1.3 billion ($1.49 billion).
MFS has appointed UBS Australia as its adviser for considering City's offer. If it split off and sold the fund management business MFS would remain a pure tourism operator.
