Jefferies will continue its over 50-year focus in investment banking
and the capital markets, and continue to maintain a highly liquid,
client-focused balance sheet. Jefferies has grown rapidly over the
past two decades and is well-positioned to continue this growth with
Leucadia National Corporation (NYSE: LUK) and Jefferies Group, Inc.
(NYSE: JEF) today announced that the Boards of Directors of both
companies have approved a definitive merger agreement under which
Jefferies' shareholders (other than Leucadia, which currently owns
approximately 28.6% of the Jefferies outstanding shares) will receive
0.81 of a share of Leucadia common stock for each share of Jefferies
common stock they hold. This exchange is intended to be tax-free to
Jefferies' shareholders. The merger, which is expected to close during
the first quarter of 2013, is subject to customary closing conditions,
including approval to effect the merger by both Leucadia and Jefferies
shareholders. In order to avert the possibility that the transaction
would result in the application of tax law limitations to the use of
certain of Leucadia's tax attributes, the merger agreement limits the
amount of Leucadia shares that can be issued to certain persons that
would otherwise become holders of 5% of the combined Leucadia's common
shares by reason of the merger.
Concurrently with the execution of the merger agreement, Leucadia,
Richard Handler, Chief Executive Officer and Chairman of Jefferies, and
Brian Friedman, Chairman of the Executive Committee of Jefferies and one
of its Directors, have each agreed pursuant to separate voting
agreements, among other things, to vote their respective shares in favor
of the transaction; and Ian Cumming, Leucadia's Chief Executive Officer
and Chairman, and Joseph Steinberg, Leucadia's President and one of its
Directors, have each agreed pursuant to separate voting agreements,
among other things, to vote their respective shares in favor of the
transaction. These voting agreements represent approximately 18.3% and
31.5% of the outstanding shares of Leucadia and Jefferies, respectively.
Upon the closing of the merger, Mr. Handler will become the Chief
Executive Officer of Leucadia, as well as one of its Directors, and also
remain Jefferies' Chief Executive Officer and Chairman; Mr. Friedman
will become Leucadia's President and one of its Directors, and also
remain Chairman of the Executive Committee of Jefferies; and Mr.
Steinberg will become Chairman of the Board of Leucadia and will
continue to work full time as an executive of Leucadia. Mr. Cumming will
retire as Chairman of the Board and Chief Executive Officer of Leucadia
upon the closing of the transaction and remain a Leucadia Director. The
other Leucadia officers will continue in their present positions. In
addition, upon the closing of the transaction, the four independent
members of the Board of Directors of Jefferies also will join the
Leucadia Board of Directors; the size of the Leucadia Board of Directors
will be increased to fourteen.
Leucadia will continue to operate in its current form, except that the
merger agreement contemplates that Leucadia's Crimson Wine Group, with a
book value of $197 million, will be spun out in a distribution that is
intended to be tax-free to current Leucadia shareholders prior to the
completion of the merger.
Jefferies, which will be the largest business of Leucadia, will continue
to operate as a full-service global investment banking firm in its
current form. Jefferies will retain a credit rating that is separate
from Leucadia's. Jefferies' existing long-term debt will remain
outstanding and Jefferies intends to remain an SEC reporting company,
regularly filing annual, quarterly, and periodic financial reports.
Following the transaction, 35.3% of Leucadia's common stock will be
owned by Jefferies' shareholders (excluding the Jefferies shares owned
today by Leucadia and including Jefferies vested restricted stock
units). Leucadia's Board of Directors has approved a new share
repurchase program authorizing the repurchase from time to time of up to
an aggregate of 25 million Leucadia common shares, inclusive of prior
authorizations. Leucadia's Board also has indicated its intention to
continue to pay dividends at the annual rate of $0.25 per common share,
but on a quarterly basis following the merger.
Mr. Cumming observed: "Joe and I have been partners for 34 years. He
will be Chairman of the Board of the combined enterprise. His role as
Chairman of the Board, along with other Leucadia and Jefferies
Directors, will ensure continuity and propel our continued success. Rich
and Brian managing the company will bring to fruition the abundant and
profitable opportunities that will be realized by this merger. My
relationship with Rich and Brian, both as advisors and, more recently,
as business partners and Jefferies Directors, showed me they can manage
Leucadia profitably long into the future. Their ability to manage and
grow Jefferies through the elongated financial bubble, successfully
navigate the crises that followed where others could not, and protect
the firm from the attacks based on false information exactly one year
ago with deftness and grace, should comfort all!"
Mr. Steinberg stated: "I am absolutely thrilled that Rich and Brian will
be joining me as we move forward with our combined company. Ian and I
have enjoyed working together for 34 years. He invited me into Leucadia
and to be his partner. I am forever grateful for that opportunity. Our
partnership produced great returns for shareholders and we have had a
lot of fun. I expect that Rich and Brian will continue on the same track
and intend to help in every way."
Mr. Handler stated: "Having known Joe and Ian for over two decades, this
transaction represents the realization of a personal dream for me. Brian
and I look forward to leading Leucadia, while continuing to serve as the
hands-on management of Jefferies, which will become Leucadia's largest
operating company. This merger will allow us to continue to create
long-term value for all of our clients, shareholders, employee-partners
and bondholders. I am honored with the trust and confidence Ian and Joe
are demonstrating by allowing us to carry on their life's work."
Mr. Friedman said: "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. Our
substantial combined equity base, ample liquidity and long-term focus
will all support meaningful long-term value creation for Leucadia and
Jefferies' shareholders. We also view with great enthusiasm the
opportunity to work with Leucadia management, who have been instrumental
in helping Ian and Joe achieve Leucadia's exceptional track record, as
well as the management teams of each of the companies in which Leucadia
is invested."
Jefferies & Company, Inc. acted as financial advisors to Jefferies.
Citigroup Global Markets Inc. acted as financial advisors and provided a
fairness opinion to the Transaction Committee of the Jefferies Board of
Directors ("Transaction Committee"), and J.P. Morgan acted as financial
advisors to Jefferies. Morgan, Lewis & Bockius acted as legal advisors
to Jefferies, and Wachtell, Lipton, Rosen & Katz acted as legal advisors
to the Transaction Committee. Rothschild acted as financial advisors to
Leucadia, and UBS Investment Bank acted as financial advisors and
provided a fairness opinion to the Leucadia Board of Directors. Weil
Gotshal & Manges acted as legal advisors to Leucadia, and Proskauer Rose
LLP acted as legal advisors to the Leucadia Board of Directors.
Conference Call
A conference call is scheduled for November 12, 2012, at 9:00 a.m. to
discuss the transaction. Investors and securities industry professionals
may access the management discussion by calling (877) 710-9938 or (702)
928-7183. A one-week replay of the call will also be available at (855)
859-2056 or (404) 537-3406 (conference ID #70517742). Presentation
slides will be used during this call and can be accessed at the Leucadia
website (www.leucadia.com)
and Jefferies website (www.jefferies.com).
About Jefferies
Jefferies Group, Inc. (NYSE: JEF) is a global investment banking firm
focused on serving clients for over 50 years. The firm is a leader in
providing insight, expertise and execution to investors, companies and
governments, and provides a full range of investment banking, sales,
trading, research and strategy across the spectrum of equities, fixed
income and commodities, in the U.S., Europe and Asia.
About Leucadia
Leucadia National Corporation (NYSE: LUK) is a diversified holding
company engaged through its consolidated subsidiaries in a variety of
businesses, including beef processing, manufacturing, gaming
entertainment, real estate activities, medical product development and
winery operations. Leucadia also has a significant equity interest in
Jefferies Group, Inc., and owns equity interests in operating businesses
including a commercial mortgage origination and servicing business.
Important Information for Investors and Shareholders
Leucadia National Corporation (Leucadia) plans to file with the SEC a
Registration Statement on Form S-4 in connection with the proposed
transaction, and Leucadia and Jefferies Group, Inc. (Jefferies) plan to
file with the SEC and mail to their respective shareholders a Joint
Proxy/Prospectus in connection with the proposed transaction. THE
REGISTRATION STATEMENT AND THE JOINT PROXY/PROSPECTUS WILL CONTAIN
IMPORTANT INFORMATION ABOUT LEUCADIA, JEFFERIES, THE PROPOSED
TRANSACTION AND RELATED MATTERS. INVESTORS AND SECURITY HOLDERS ARE
URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY/PROSPECTUS
CAREFULLY WHEN THEY BECOME AVAILABLE. Investors and security holders
will be able to obtain free copies of the Registration Statement and the
Joint Proxy/Prospectus and other documents filed with the SEC by
Leucadia and Jefferies through the web site maintained by the SEC at www.sec.gov.
In addition, investors and security holders will be able to obtain free
copies of the Registration Statement and the Joint Proxy/Prospectus by
phone, e-mail or written request by contacting the investor relations
department of Jefferies or Leucadia at the following:
Jefferies
520 Madison Avenue, New York, NY 10022
Attn:
Investor Relations
203-708-5975
info@jefferies.com
Leucadia
315
Park Avenue South Address, New York, NY 10010
Attn: Investor
Relations
212-460-1900
Participants in the Solicitation
Leucadia and Jefferies, and their respective directors and executive
officers, may be deemed to be participants in the solicitation of
proxies in respect of the proposed transactions contemplated by the
merger agreement. Information regarding Leucadia's directors and
executive officers is contained in Leucadia's proxy statement dated
April 13, 2012, which has been filed with the SEC. Information regarding
Jefferies' directors and executive officers is contained in Jefferies'
proxy statement dated March 28, 2012, which is filed with the SEC. A
more complete description will be available in the Registration
Statement and the Joint Proxy/Prospectus.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward looking statements" within the
meaning of the safe harbor provisions of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward looking statements include statements about Jefferies' and
Leucadia's future and statements that are not historical facts. These
forward looking statements are usually preceded by the words "expect,"
"intend," "may," "will," or similar expressions. All information and
estimates relating to the merger of Leucadia and Jefferies and the
combination of those businesses constitute forward looking statements.
Forward looking statements may contain expectations regarding
post-merger activities and financial strength, operations, synergies,
and other results, and may include statements of future performance,
plans, and objectives. Forward looking statements also include
statements pertaining to Leucadia and Jefferies strategies for future
development of our businesses, the payment by Leucadia of quarterly
dividends, the spin off of Leucadia's Crimson Wine Group, and Leucadia's
ability to utilize certain of its tax attributes. Forward looking
statements represent only Leucadia's and Jefferies' beliefs regarding
future events, many of which by their nature are inherently uncertain or
subject to change. It is possible that the actual results may differ,
possibly materially, from the anticipated results indicated in these
forward-looking statements. Information regarding important factors that
could cause actual results to differ, perhaps materially, from those in
Leucadia's and Jefferies' forward looking statements is contained in
reports that are filed and will be filed with the SEC. You should read
and interpret any forward looking statement together with such reports.
For further information, please contact:
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20121112005778/en/
Jefferies Group, Inc.
Peregrine Broadbent, Chief Financial Officer
212-284-2338
or
Leucadia
National Corporation
Laura Ulbrandt, AVP and Corporate Secretary
212-460-1900
© Business Wire 2012
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