Stella Travel comes off trading halt today

By Tamsyn Parker

More details on the future of the Stella Travel Group, the travel arm of Australian finance and tourism business MFS, are expected to be known today as the troubled firm comes off a two-day trading halt.

MFS, which owns New Zealand wholesale travel operator Gullivers, asked to be put into a halt on Monday after several unsolicited offers for Stella, and following its failure to reach a deal with City Pacific which wanted to buy the fund management side of MFS.

MFS CEO and founder Michael King also stepped down on Monday after the company's share price fell almost 70 per cent last Friday over concerns that it is facing serious debt problems.

Several parties are thought to be in talks with MFS but as yet no one has confirmed having an offer on the table although Stella's main rival on its travel service side of the business, Flight Centre, has said it is unlikely to pursue assets held by MFS.

In a statement to the ASX, Flight Centre managing director Graham Turner said: "FLT has historically been reasonably disciplined in applying its acquisition strategy and has only pursued businesses that could be acquired for the right prices to create significant shareholder value.

"For various reasons at this stage, we do not believe at this time that the MFS travel assets represent an attractive acquisition opportunity."

Last year MFS tried to sell half of Stella to a private equity consortium led by CVC Asia Pacific but CVC failed to meet price expectations.

CVC did not return calls from the Business Herald yesterday.

Industry sources said CVC was the most obvious bidder. Interest is also thought to be likely from British or European parties wanting to expand in the Asia-Pacific region.

The source said more interest was likely to be generated if MFS split up the tourism business and tried to sell it separately with the resorts side of the business likely to appeal to big hotel player Accor.

The Stella business includes a resort business which is the second largest in Australia.

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