whats going on with mfs, page-6

PROPOSED SEPARATION OF STELLA & MFS FINANCIAL SERVICES
18 January 2008
As indicated in previous announcements to the market on 28 November 2007 and 3 December
2007, MFS Limited (ASX: MFS) has been considering a separation of the Stella Group (Stella)
and MFS Financial Services businesses into standalone entities. MFS is now pleased to confirm
its intention to separate these businesses into two ASX listed companies.
It is expected that the separation will be achieved via a scheme of arrangement subject to both
MFS shareholder and Court approval and that the process will be completed in Q2, 2008.
In conjunction with the separation, both Stella and MFS Financial Services will be recapitalised to
reduce indebtedness and to achieve capital structures that are appropriate for the different
markets and capital requirements of these respective businesses.
It is intended to fund the recapitalisations via an approximately $550 million renounceable
entitlement offer of shares in Stella. The entitlement shares will be attractively priced to maximise
participation by MFS shareholders on the register as at the record date. It is anticipated that the
entitlement offer will be fully underwritten.
MFS believes that the proposed separation and recapitalisation will act to crystallise the inherent
value of both businesses and will deliver to shareholders two well capitalised companies each
with different but attractive investment characteristics. The separation will also enable MFS
shareholders to retain all the benefits of ownership of both MFS Financial Services and Stella.
Further details in relation to the proposed separation are contained in the attached presentation.
MFS has been working with Grant Samuel, Macquarie Bank, UBS and Freehills (legal adviser)
and KPMG (accounting and tax adviser) in relation to the proposed transaction