Bloomberg reported that the improved financial picture at the Boston-based MFS prompted Sun Life Financial Inc., Canada’s second-largest insurer, to scrap its prior plans to sell MFS (See Sun Life Admits Seeking Outside Advice about MFS ). Wachovia Corp. and Mellon Financial Corp. were bidding for the unit, a person familiar with the situation told Bloomberg on October 12. MFS may be worth about $3 billion, the people said.
According to the Bloomberg report, the Toronto-based Sun Life said MFS increased revenue 8.7% in the first six months of the year, leading to a profit of $92 million, up from $71 million a year earlier. MFS manages $175 billion in assets including mutual funds and institutional accounts.
MFS has suffered a host of recent troubles including losing $3.7 billion in mutual-fund shareholder withdrawals this year through July 31. Its net outflows are the fourth-highest in the fund industry in 2006, according to industry data. MFS agreed in 2004 to pay $351 million in penalties for allowing some investors to make improper trades in its funds (See MFS Scandal Settlement Finalized ). The settlement was made with the US Securities and Exchange Commission, New York Attorney General Eliot Spitzer and New Hampshire securities officials.
SeveralUS banks were considering a purchase of MFS to expand their money management businesses.