MFS' change of mind - keep Stella

The decision follows an unsuccessful attempt to sell off a 50% stake in the Stella Group.

Announced in June 2007, the contract was scheduled to be finalised in September in what could have been the biggest deal in Australia's tourism sector.

However, the plan arrived to a halt after a failure to negotiate a price with its private equity partner.

"Favourable travel market conditions, the potential for further growth and ongoing strong financial results have convinced MFS that Stella Group should be withdrawn from sale," chief executive Michael King said.

Holding on to Stella, MFS hopes to capitalise on the continuing strength of both the business and the domestic and international tourism and travel sectors.

Michael King said after reviewing Stella's year to date results, it was the decision of the Board of MFS Limited that it was in the best interests of MFS shareholders for Stella to be withdrawn from partial sale.

"The Stella Group continues to perform very well and is now a key ongoing contributor to the earnings of the MFS business," he said.

MFS finished 28 cents up at $4.70.

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