Author Topic: JEF - Jefferies Group  (Read 604705 times)

valuecfa

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Re: JEF - Jefferies Group
« Reply #370 on: October 19, 2012, 08:57:18 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.

Or they are just finding few attractive deals relative to the rates their credit rating provides and they are comfortable at the time being earning mediocre returns implied by their current borrowing rates and just redeeming debt


Kiltacular

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Re: JEF - Jefferies Group
« Reply #371 on: October 19, 2012, 09:06:27 AM »
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Or they are just finding few attractive deals relative to the rates their credit rating provides and they are comfortable at the time being earning mediocre returns implied by their current borrowing rates and just redeeming debt

So you don't find the rapidity with which they are doing these sales surprising?  Buyers from them must be getting the idea that they are in a good negotiating position, no? 

tombgrt

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Re: JEF - Jefferies Group
« Reply #372 on: October 19, 2012, 09:14:13 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.

Or they are just finding few attractive deals relative to the rates their credit rating provides and they are comfortable at the time being earning mediocre returns implied by their current borrowing rates and just redeeming debt

No need to sell the MLI position at such a discount then no?

valuecfa

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Re: JEF - Jefferies Group
« Reply #373 on: October 19, 2012, 09:20:19 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.

Or they are just finding few attractive deals relative to the rates their credit rating provides and they are comfortable at the time being earning mediocre returns implied by their current borrowing rates and just redeeming debt

No need to sell the MLI position at such a discount then no?

That is a good point. I suspect they are raising cash for an specific opportunity. But at times where there are limited attractive deals it makes sense for them to redeem debt given their circumstance of limited op cash flows and poorer credit rating.

Kiltacular

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Re: JEF - Jefferies Group
« Reply #374 on: October 19, 2012, 09:29:30 AM »
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But at times where there are limited attractive deals it makes sense for them to redeem debt given their circumstance of limited op cash flows and poorer credit rating.


Valuecfa,

I agree with you and given what they said at their annual meeting -- regarding it's "scary" out there, etc. -- at first that is all I thought they were doing when they did the Fortescue deal...just closing that one down opportunistically and possibly worried that Chinese demand for ore was headed in the wrong direction longer term.

My comment about the world coming to an end was facetious. 

So, you could be right that they are just pulling in their horns.

I may be guilty of just "hoping" here.  But, it does seem like they hope they've got something big brewing.

They always fund to watch, in any case.

Parsad

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Re: JEF - Jefferies Group
« Reply #375 on: October 19, 2012, 10:33:57 AM »
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But at times where there are limited attractive deals it makes sense for them to redeem debt given their circumstance of limited op cash flows and poorer credit rating.


Valuecfa,

I agree with you and given what they said at their annual meeting -- regarding it's "scary" out there, etc. -- at first that is all I thought they were doing when they did the Fortescue deal...just closing that one down opportunistically and possibly worried that Chinese demand for ore was headed in the wrong direction longer term.

My comment about the world coming to an end was facetious. 

So, you could be right that they are just pulling in their horns.

I may be guilty of just "hoping" here.  But, it does seem like they hope they've got something big brewing.

They always fund to watch, in any case.

I'm pretty sure they've got something big brewing.  We'll know soon enough.  Cheers!
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scorpioncapital

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Re: JEF - Jefferies Group
« Reply #376 on: October 20, 2012, 11:48:41 AM »
Look at the 2011 annual letter. The wording of the letter about MLI and the FMG note suggests they had absolutely no intention of selling around April 2012. They considered them good medium term investments.

I'm not sure how wise it is to sell assets to bid on auction you may not win - what happens if you lose?

I'm thinking they either have a signed agreement on something (or the odds are far higher than 50% of a deal being made) or their view of the climate has changed.

Parsad

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Re: JEF - Jefferies Group
« Reply #377 on: October 20, 2012, 02:04:11 PM »
Look at the 2011 annual letter. The wording of the letter about MLI and the FMG note suggests they had absolutely no intention of selling around April 2012. They considered them good medium term investments.

I'm not sure how wise it is to sell assets to bid on auction you may not win - what happens if you lose?

I'm thinking they either have a signed agreement on something (or the odds are far higher than 50% of a deal being made) or their view of the climate has changed.

FMG needed to buy their note, so that they could issue more debt in the future.  Without LUK's approval, no new debt could be issued.  But yes, with MLI, they had no plans on selling.  From everything I know about these guys, they have either a new target or they are buying more of something they already own.  Cheers!
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JRH

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Re: JEF - Jefferies Group
« Reply #378 on: October 31, 2012, 07:18:57 AM »
Twitter: @D3302

Grenville

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Re: JEF - Jefferies Group
« Reply #379 on: October 31, 2012, 08:05:37 AM »
More speculation on a Leucadia takeover target - Whitehaven Coal in Australia:

http://www.businessspectator.com.au/bs.nsf/Article/Nathan-Tinkler-Whitehaven-board-Endcoal-Elders-Rur-pd20121030-ZJRCF?OpenDocument

And a little more background info on the situation:

http://www.reuters.com/article/2012/10/31/us-australia-whitehaven-idUSBRE89U0BI20121031

Thanks for the links and the post. Will be interesting to see how LUK puts their liquidity to work.