Jefferies Agrees To Buyout By Shareholder Leucadia By Kevin Harlin, Investor's Business Daily
Posted 11/12/2012 03:35 PM ET
Jefferies Group (JEF) agreed to a buyout from its largest investor, the diversified operations firm Leucadia National (LUK), in a deal that values the investment bank at $3.6 billion.
Leucadia, which currently owns approximately 28.6% of Jefferies shares, will pay out 0.81 of its shares for each Jefferies share. The deal, expected to close in Q1, still requires shareholder approval.
The deal helps shore up Jefferies' balance sheet, and helps it diversify into a full-service investment bank and away from its niche role in underwriting junk bonds.
Jefferies' credit rating was cut in October to one notch above junk status by Moody's Investors Service, in part because of risks seen with its aggressive growth strategy.
"This merger will allow us to operate from a position of even greater strength, take advantage of opportunities that arise in and around the business of Jefferies, and continue Leucadia's longstanding practice of smart value acquisitions and investments," Jefferies executive committee Chairman Brian Friedman said in a statement.
Jefferies share popped early and were up 13% intraday to 16.09. Leucadia shares were down 4% to 20.94.
Jefferies CEO Richard Handler will keep that role in the combined company. Leucadia chairman and CEO Ian Cumming will retire.
Investment banks and large money centers have been posting mostly better-than-expected results this quarter, despite a difficult global investment banking environment.
Read More At IBD: news.investors.com |
