Jefferies Group Inc. (JEF) Executive Committee Chairman Brian
Friedman said Leucadia National Corp. (LUK) may make strategic,
long-term investments to complement Jefferies following its deal to
merge with the securities firm.
Earlier Monday, Leucadia, a financial conglomerate which already
had a 29% stake in Jefferies, agreed to buy the portion of the
company it didn't already own in a transaction that gives Jefferies
a large financial backer during a period of economic
uncertainty.
During a conference call with analysts, Jefferies Chairman and
Chief Executive Richard Handler--who will become Leucadia's
CEO--said the transaction won't result in any layoffs at Jefferies,
nor does the firm plan to offer a retention deal to its roughly
3,800 employees.
Mr. Handler said that following the transaction it is "business
as usual" for Jefferies, noting that the deal will give employees a
platform on which to build "for the next 10 years."
The deal, which is expected to close in the first quarter of
2013, was announced roughly a year after Jefferies faced intense
scrutiny over its European exposure as investors feared it would
sink in the wake of its failed rival MF Global Holdings Ltd.
(MFGLQ).
Jefferies' management, led by Mr. Handler, though, was able to
restore investor confidence following that crisis, in part by a
quick response, including increased disclosure, to marketplace
questions about its exposure to debt issued by weaker European
governments. An outsize bet on those securities helped lead to MF
Global's demise.
On the call, analysts questioned Mr. Handler about the timing
and rationale for the deal, which comes as banks are grappling with
an on-going European debt crisis and concerns about a slowing U.S.
economy and the U.S. government's looming "fiscal cliff."
In response, Mr. Handler said the deal was reached at a time of
strength for both companies, touting Leucadia's strong
liquidity.
He said the transaction was contemplated at times over the last
four years, but that the "stars hadn't aligned like they did
today."
Shares of Jefferies surged 12.2% to $16.01 following the deal
announcement, while Leucadia fell 4.6% to $20.82.
Write to Brett Philbin at brett.philbin@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires