By Brett Philbin
Plaintiffs who sued Jefferies Group Inc. (JEF) over its planned
sale to Leucadia National Corp. (LUK) agreed not to file a motion
that could have forced Jefferies to postpone a shareholder vote on
the deal after the company agreed to provide more information about
its possible future financial performance.
In a regulatory filing late Tuesday with the Securities and
Exchange Commission, Jefferies included an updated version of a
dividend discount analysis prepared by Citigroup Inc. (C), which
included a projection of the investment bank's revenue, net income
to common shareholders and dividends for fiscal years 2012 to
2018.
A previous version of the analysis--designed to provide an
implied equity value of Jefferies common stock--didn't include a
breakout of such numbers.
Jefferies said it was providing the information because the
plaintiffs who had sued over the merger "agreed not to make a
motion for a preliminary injunction to enjoin the Jefferies
stockholder meeting" on Feb. 28, where shareholders are expected to
vote on the transaction.
Citi wasn't provided with internal financial forecasts prepared
by Jefferies' management, and "at the time Citi performed its
analysis, Jefferies' management advised Citi that it had not yet
completed its fiscal year 2013 budget process," Jefferies said in
the filing.
In November, Jefferies agreed to be acquired by Leucadia, its
largest shareholder, in a roughly $2.5 billion deal that is
expected to close later this month, pending the stockholder vote.
The transaction will give Jefferies a big financial backer with a
thick wallet.
In a joint proxy statement filed in late January, Jefferies and
Leucadia disclosed the New York lawsuits, along with four
additional legal actions that were filed in Delaware State
court.
Jefferies said the lawsuits alleged company directors breached
their fiduciary duties to stockholders by "engaging in a flawed
process for selling the company and agreeing to sell Jefferies for
inadequate consideration pursuant to a merger agreement that
contains improper deal protection terms."
Jefferies said the actions allege executives, including Chairman
and Chief Executive Richard Handler, "represent controlling
shareholders of Jefferies and failed to fulfill their fiduciary
duties in connection with the proposed transaction."
The plaintiffs were seeking an injunction barring the proposed
merger.
Shares of Jefferies closed Tuesday up 0.8% at $21.32. The stock
has climbed nearly 50% since the Leucadia deal was announced on
Nov. 12, helped also by a broader rally among financial stocks. The
company's shares have risen about 15% so far in 2013.
Write to Brett Philbin at brett.philbin@dowjones.com
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