Leucadia Jumps Most in Nine Years as It Becomes Jefferies Anew

(Bloomberg) -- The owner of Jefferies Group decided its future is in investment banking.

Leucadia National Corp. is changing its name to Jefferies Financial Group Inc. as it sells off most of its meatpacking and auto-dealer businesses. The shares surged 12 percent in New York, the biggest jump since April 2009.

The moves will transform what the company called a diverse “but relatively random” group of assets into a financial-services firm, New York-based Jefferies said Monday in a statement.

Leucadia agreed to purchase Jefferies in November 2012 for $2.8 billion and install Jefferies management as its top executives. Leucadia, then run by Ian M. Cumming and Joseph S. Steinberg, had owned the biggest stake in Jefferies prior to the acquisition, having boosted its holdings in November 2011 as the investment bank’s stock slid during Europe’s sovereign-debt crisis.

Leucadia, run by Chief Executive Officer Richard Handler, on Monday agreed to sell a 48 percent stake in U.S. meatpacker National Beef to Marfrig Global Foods SA for about $900 million in cash, and announced sales of an auto-dealer business called Garcadia and related real-estate interests.

“The randomness of the businesses probably prevented a lot of potential investors from sharpening their pencils” on Leucadia, David Havens, an analyst at Imperial Capital, wrote in a note Monday. Money managers potentially interested in making an investment in the firm previously needed to research broker-dealer trends along with meat prices and feed costs.

The firm controls several financial-services companies in addition to Jefferies, including in asset management, commercial-mortgage banking and residential real-estate development. Through its merchant-banking operations, it has ownership stakes in other firms including a broadband services company, a timber harvester and a mining project.

Handler and Brian Friedman, chairman of the Executive Committee, said in a note addressed to Jefferies clients Monday that “nothing will change in how we work with you.”

©2018 Bloomberg L.P.