stella sale, page-10

Some mention of using EBITDA as a guide to potential sale value of a business. Good discussion and a fair means to work out sale values.

MFS in a previous presentation have used a EBITDA multiple of 12 to value Stella as at Dec 2007 (or in excess of $2.5 billion).......company is growing at 30% PA, so MFS use a high multiple.....even I would agree 12 is far too high.

6 or 7 would be an excellant result for MFS.....at least in terms of the existing $1 shareprice.

Once again tonight....lets just use an extreme situation to highlight how oversold $1 is.

For purposes of this discussion, lets say MFS sell STELLA for the equilivant of a 4 EBITDA multiple. Based on their guidance of $210 million......means 50 % of STELLA is sold for $425 million.....(understand incoming buyer would pay $425 m for half of STELLA - includes current debt, future profits/growth etc)

means whole of STELLA is worth $850 million ($1.80)....compares with their $1 shareprice market capitalisation of $480 million......but of course does not include funds management business.

The good thing about a major sale of part of their business.....is that even in this tough environment....a sale will serve to put a specific real value on the company.

A little bit like a takeover...but obviously less definative - given a half sale of STELLA may be worth 35% of their total business. (but helfull never the less)