Morgan & Banks Limited

Morgan & Banks - $4.53: On the eve of merging with TMP Worldwide of the United States, MBK has produced a 16% increase in net profit to $7.7m for the six months to September 30, 1998. While approval is still needed from the US Securities & Exchange Commission and the Supreme Court of Australia, the merger is expected to be consummated within weeks. It now seems that it's unlikely that TMP will pull out of the merger (they have the option if its average share price falls below US$25 for the 20 days leading up to the merger). We still stick by our previous recommendation of taking profits into strength, as we would prefer to err on the side of caution until there's a better understanding of the TMP business and what they plan for MBK. Remember that the shares that will be listed on the ASX will no longer be those of Morgan & Banks but their US counterpart.