Author Topic: JEF - Jefferies Group  (Read 599295 times)

hellsten

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Re: JEF - Jefferies Group
« Reply #400 on: November 12, 2012, 06:59:22 AM »
The market doesn't seem to be very happy about this acquisition. LUK -5%. Somehow I'm not surprised. I guess the market puts 2 and 2 together and thinks the future is not very bright for JEF and LUK:
Quote
Since 1990:
JEF 15.9% CAGR
LUK 13.1% CAGR

Since 2000:
JEF 9.2% CAGR
LUK 9.4% CAGR


WhoIsWarren

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Re: JEF - Jefferies Group
« Reply #401 on: November 12, 2012, 07:12:10 AM »
Can anyone guess why they've decided to spin Crimson Wine? 

I've not focused on this business much up to now and know nothing about wine.  Anyone??

Grenville

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Re: JEF - Jefferies Group
« Reply #402 on: November 12, 2012, 07:22:57 AM »
Based on the ways things are trading, you can buy LUK on the cheap through JEF shares.

1 JEF share = 0.81 LUK
or $16 for 0.81 LUK ~ $19.8/ LUK share

bmichaud

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Re: JEF - Jefferies Group
« Reply #403 on: November 12, 2012, 07:31:06 AM »
I'm lost - what is the point of the buyback simultaneous with share issuance?
« Last Edit: November 12, 2012, 07:40:28 AM by bmichaud »

txlaw

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Re: JEF - Jefferies Group
« Reply #404 on: November 12, 2012, 07:31:44 AM »
Wow, this is great.

The ratio of LUK shares per JEF share seems just about right to me.

enoch01

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Re: JEF - Jefferies Group
« Reply #405 on: November 12, 2012, 07:35:53 AM »
I'm lost - what is the point of the buynback simultaneous with share issuance?

It's what you want to do if you want to buyback cheap shares, and save cash when you make the Jefferies acquisition.

bmichaud

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Re: JEF - Jefferies Group
« Reply #406 on: November 12, 2012, 07:51:37 AM »
I still don't understand the mathematics - are proforma-LUK shares now suddenly cheaper AFTER paying a premium for JEF shares not owned? Wouldn't they have been better off buying $500mm more JEF shares on the open mkt before taking it over?    Perhaps it's a neat financial engineering trick - I'm curious...

JRH

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Re: JEF - Jefferies Group
« Reply #407 on: November 12, 2012, 07:54:27 AM »
I'm lost - what is the point of the buynback simultaneous with share issuance?

It's what you want to do if you want to buyback cheap shares, and save cash when you make the Jefferies acquisition.

The buyback grants them optionality during and after the merger process.  I'm happy to see it, given that I believe the Leucadia pricipals display good opportunistic judgment.
Twitter: @D3302

JRH

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Re: JEF - Jefferies Group
« Reply #408 on: November 12, 2012, 07:56:39 AM »
I still don't understand the mathematics - are proforma-LUK shares now suddenly cheaper AFTER paying a premium for JEF shares not owned? Wouldn't they have been better off buying $500mm more JEF shares on the open mkt before taking it over?    Perhaps it's a neat financial engineering trick - I'm curious...

They are limited to 30% ownership.  I think the materials today state they were at 28.6% (due to share grants, I would guess).  I guess they could have sneaked in a few more shares to get back to 30%.
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link01

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Re: JEF - Jefferies Group
« Reply #409 on: November 12, 2012, 09:48:18 AM »
I still don't understand the mathematics - are proforma-LUK shares now suddenly cheaper AFTER paying a premium for JEF shares not owned? Wouldn't they have been better off buying $500mm more JEF shares on the open mkt before taking it over?    Perhaps it's a neat financial engineering trick - I'm curious...

i think the rationale is simple: they bagged a big operating co that will ensure luk maximizes monetization of their NOL's, most importanntly, accelerating the utilization of them.

they also go far to address  the leadership sccession issue. it seems to me that cummings was especially ready to pass the baton.

i have to admit i'm not too fond of the operating model of i-banks, tho. especially in the new normal...