Author Topic: JEF - Jefferies Group  (Read 599296 times)

Parsad

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Re: JEF - Jefferies Group
« Reply #360 on: October 09, 2012, 03:30:06 PM »
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jeffmori7

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Re: JEF - Jefferies Group
« Reply #361 on: October 09, 2012, 03:50:25 PM »
Could Leucadia be raising cash to buy Jefferies? Would it be interesting for them and would it be feasible?

JRH

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Re: JEF - Jefferies Group
« Reply #362 on: October 11, 2012, 10:29:32 AM »
I think something is definitely up.

Cash (380) + MLI (427) + FMG (715) = 1,522

Have any details been made public as to when they receive the FMG proceedings?

I definitely think they have found or negotiated another target company.  The cash from Fortescue is to be received by the middle of December I believe, once Fortescue's new credit line is fully in place.  Cheers!

Are there regulatory or other factors that would constrain or even prevent them from acquiring Jefferies?  Seems to me like they are within strking distance if they wanted to make a cash + stock offer.

I have no special insight into what Leucadia would or wouldn't be after, but they purchased a significant amount at higher prices, and why purchase a single share if you wouldn't purchase the whole thing?
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Parsad

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Re: JEF - Jefferies Group
« Reply #363 on: October 11, 2012, 02:16:46 PM »
I think something is definitely up.

Cash (380) + MLI (427) + FMG (715) = 1,522

Have any details been made public as to when they receive the FMG proceedings?

I definitely think they have found or negotiated another target company.  The cash from Fortescue is to be received by the middle of December I believe, once Fortescue's new credit line is fully in place.  Cheers!

Are there regulatory or other factors that would constrain or even prevent them from acquiring Jefferies?  Seems to me like they are within strking distance if they wanted to make a cash + stock offer.

I have no special insight into what Leucadia would or wouldn't be after, but they purchased a significant amount at higher prices, and why purchase a single share if you wouldn't purchase the whole thing?

When Leucadia originally made the equity investment in Jefferies, they were restricted from acquiring more than 30% of the company.  I would expect that with board approval, and their cordial relationship, that limit could be lifted if it came to that.  I don't believe there are any other regulations that would prevent Leucadia from acquiring Jefferies, but it would probably still need government approval if a deal came to fruition.  Cheers!
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BargainValueHunter

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Re: JEF - Jefferies Group
« Reply #364 on: October 16, 2012, 07:13:42 PM »
Maybe a LUK takeover would be cheaper now:

http://www.moodys.com/research/Moodys-downgrades-Jefferies-to-Baa3--PR_257696

Quote
The downgrade of Jefferies' senior unsecured rating to Baa3 reflects Moody's concerns regarding the challenges Jefferies faces in preserving its risk management culture and managing risk concentrations, and better incorporates risks presented by institutional capital markets activities and the challenges of operating the investment banking model. These business model challenges are some of the factors that led Moody's to downgrade the unsupported baseline credit assessments of many global investment banks into the Baa range in June 2012.

Moody's believes that concentration risks are inherent in the capital markets business and can arise either through important banking relationships or through competitive pressures. Preserving a firm's risk management culture through periods of opportunistic growth is particularly challenging, the rating agency noted.

Since the onset of the financial crisis in 2007, Jefferies has grown significantly and opportunistically, gaining market share in investment banking and diversifying its fixed income platform. As a result, Jefferies relative competitive position has improved. However, this growth also introduces risks as the firm integrates the people and operations that it has acquired, and establishes long-term discipline around risk taking. Being a mid-sized firm has enabled Jefferies' most senior management to remain highly engaged in this process, and this is positive. However, in Moody's view it also points to key-people risk. As the firm continues on its growth path, the ability of its senior leaders to remain as highly involved will diminish, and this longer-term risk is incorporated into the firm's ratings.
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JRH

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Re: JEF - Jefferies Group
« Reply #365 on: October 17, 2012, 11:20:50 AM »
Maybe a LUK takeover would be cheaper now:

http://www.moodys.com/research/Moodys-downgrades-Jefferies-to-Baa3--PR_257696

Also possible Leucadia could provide cash flow diversification/stability to lower the interest rate Jefferies pays for its long-term debt.
« Last Edit: October 17, 2012, 11:23:05 AM by JRH »
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biaggio

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Re: JEF - Jefferies Group
« Reply #366 on: October 19, 2012, 05:03:27 AM »
http://biz.yahoo.com/e/121019/luk8-k.html

On October 17, 2012, the Company sold its oil and gas drilling subsidiary, Keen Energy Services, LLC, for cash consideration of $100,000,000, and a $40,000,000 four-year interest bearing promissory note issued by the purchaser. The Company will also retain Keen's net working capital, principally cash, receivables and payables. Keen had been classified as a discontinued operation. The Company recorded a pre-tax loss on sale of discontinued operations of approximately $19,300,000.

mankap

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Re: JEF - Jefferies Group
« Reply #367 on: October 19, 2012, 07:23:58 AM »
They already got $715m cash from FMG, sooner than I was expecting.They got another 100m from keen energy.What are  they upto?.They have collected so much cash in last one month.Are they buying Rescap.I am so tempted to but some calls.


On October 18, 2012, Leucadia National Corporation (the "Company") received the payment of $715,000,000 as a result of the consummation of the transactions contemplated by the previously disclosed Deed of Release, Termination and Settlement dated 19 September 2012 between Fortescue Metals Group Ltd (Fortescue) and Chichester Metals Pty Ltd (Chichester), and John Andrew Henry Forrest (Forrest) and Leucadia National Corporation (Leucadia) and Baldwin Enterprises Inc. (Baldwin). As a result, the Company expects to record a pre-tax gain of approximately $526,000,000 in the fourth quarter of 2012.

On October 17, 2012, the Company sold its oil and gas drilling subsidiary, Keen Energy Services, LLC, for cash consideration of $100,000,000, and a $40,000,000 four-year interest bearing promissory note issued by the purchaser. The Company will also retain Keen's net working capital, principally cash, receivables and payables. Keen had been classified as a discontinued operation. The Company recorded a pre-tax loss on sale of discontinued operations of approximately $19,300,000.


JRH

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Re: JEF - Jefferies Group
« Reply #368 on: October 19, 2012, 07:59:24 AM »
They already got $715m cash from FMG, sooner than I was expecting.They got another 100m from keen energy.What are  they upto?.They have collected so much cash in last one month.Are they buying Rescap.I am so tempted to but some calls.

The timing and clumped nature of these liquidations support the idea.

"The sales, which are subject to higher bids, could generate more than $4 billion for ResCap's estate, a price that ResCap said was high enough to justify the millions in bonuses. Berkshire's bid for the legacy loans is $1.7 billion, while Nationstar's bid for the existing mortgage platform is $2.5 billion. The "legacy" loans being bid on by Warren Buffett's Berkshire are mortgages being held for sale."

http://www.nasdaq.com/article/judge-approves-rescap-bonuses-auctions-set-for-next-week-20121017-01001#.UIFoc29JMuc

They're within sneezing distance of the Berkshire bid by themselves.  Also possible they are partnering with Berkshire in some form or another.  Who knows.
« Last Edit: October 19, 2012, 08:07:32 AM by JRH »
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Kiltacular

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Re: JEF - Jefferies Group
« Reply #369 on: October 19, 2012, 08:31:16 AM »
Doing Rescap (likely with Berkshire) makes more sense to me than a buyout of JEF if for only the reason that if they were going to try to buy out JEF there wouldn't be this sudden need to do it.

They are selling / cutting deals on their biggest positions (aside from JEF) and some smaller ones (Keen) very rapidly.  They obviously didn't get their best price for the MLI share sale.

My guess is that they think (or know?) they have a very, very good shot at getting something done and that something is happening soon. 

Either that, or they think the world is coming to an end.