Saw the WSJ article, curious how this will play out if it ends up happening. Does the SMFG balance sheet help Jeff expand and compete with BBs? Or do seniors jump ship and this thing flops
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Bloomberg released a new article saying "SMBC has no immediate plans," CNBC said "Jefferies isn't interested in selling at this point," although that would be convenient for SMBC to say. It sounds like an eventual plan for both sides, but eventually might not be for a while.
Jefferies has been using the SMBC balance sheet as it was part of an agreement they've had in place since 2021.
Curious if people think this would be a Mizuo-Greenhill situation, where the banks are folded into each other sans Rx, or and MUFG-MS situating, where Jefferies will run mostly as is
Hear analysts are worried they'd get Greenhill'd
American banks are trending towards European-style consolidation (less so now with better banking regulations for regional banks under the new admin). SMBC Americas leadership saw the success of RBC bolt-ons of specific American boutiques and got excited about market entry into equity and M&A platforms as a non-US entity. They view Jefferies as a platform that offers those two products and there were obvious synergies there regarding their balance sheet. I know most Jefferies people don’t want to be acquired by SMBC and since Jefferies’ value is largely supported by Handler, an aggressive acquisition risks losing him and his senior bankers as key value drivers. Japanese banks are also often stereotyped as shitter advisory platforms and it’s largely true. They are too bureaucratic, which hinders that sort of dealmaking. Probably be a while, but I think SMBC is trending towards a full acquisition of the Jefferies platform (SMBC already dissolved their M&A and ECM teams and downsized their LevFin group).
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Seems opportunistic looking at the Jefferies stock price, even though there is that long-term relationship. But the timing of this investment with all the issues of private credit and leveraged finance is also a bit worrisome
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I think I found the reason for this story:
Don't think Japanese Banks have the best history of acquiring US Banks, but the jury is still out on Greenhill/Augusta and if they will be material for those platforms. Japanese banks are capital-stacked, and want to avoid Yen compression domestically.
MUFJ did a great job holding up Morgan Stanley
that is true
Brb, just getting the comps on the Al Miraj-Pierpoint takeover to benchmark this!
Dont mix up the EqV and EV. Thx
From what I have seen putting more money into a bank that can be used for senior compensation generally doesn’t cause them to leave. Seniors leave when they aren’t getting paid or find better opportunities elsewhere. They seem to follow the money in my humble opinion
"Anyone in Japan want to grab lunch?"
Bro's not fooling soul 🥀🥀
It is all a massive psyop. I am actually about to buy Jeffries.
:|
What happens to the clawbacks in the event of a sale?
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Real talk. The Japanese will need to assassinate Rich Handler and/or pull a Pearl Harbor on Tribeca if they want a chance to actually pull off a full change of control at Jefferies 🤣🤣🤣
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