Sun Life Financial today announced it won't sell MFS Investment Management, ending a flurry of speculation that followed the announcement last month that it had hired investment bankers to advise it on a possible sale. Sun Life will "continue to own and invest in MFS and is not pursuing any third-party transactions concerning the firm," according to a news release.
While some analysts had tied the hiring of investment bankers to shareholder concerns about MFS' subpar growth, Sun Life released third-quarter numbers for the firm today that it said point to "continued growth." Sun Life's net income from MFS for the quarter came to $52 million, up 11% from the prior quarter and up 37% from the year before, according to the release. MFS had a record $175 billion in assets under management as of Sept. 30, up 4.2% from the previous quarter and up 11% from the year before. Pre-tax profit margins, meanwhile, improved to 30% in the latest quarter. MFS spokesman John Reilly said average margins for the firm in 2005 came to 22%. Sun Life is due to formally announce its third quarter results on Thursday.
"We are very pleased with the decision that resulted from this process and that our growth will continue under our current ownership structure," MFS CEO Robert Manning said in the statement.
"Together with the senior management of MFS, we will focus on improving performance and profit margins and expanding its global investment and distribution platforms," Sun Life CEO Donald A. Stewart said in the release.
In afternoon trading today, Sun Life's stock was $39.70, down 2.5% from Friday's close of $40.71.
Sun Life spokeswoman Susan Jantzi said despite the high degree of outside interest in MFS, Sun Life concluded that the current ownership structure offered "the most superior option for (delivering) long-term value."