NEW YORK - Jefferies Financial Group Inc. (NYSE: JEF) has entered into an agreement to sell the majority of OpNet S.p.A.'s operations to Wind Tre S.p.A., a subsidiary of CK Hutchison Group Telecom Holdings Ltd. (CKHGT). The deal, part of Jefferies' strategy to focus on its core investment banking business, is valued at €485M, subject to adjustments.
The transaction will be paid partly in cash to cover OpNet's financial debt, transaction costs, and other obligations, with approximately €225M potentially paid in cash or three-year notes issued by CKHGT. These notes are comparable to CKHGT’s publicly listed investment-grade bonds and are marketable. Following the sale, OpNet will maintain majority stakes in other telecom companies, culminating in an estimated €320M value for Jefferies, surpassing its current carrying value. The sale is pending regulatory approval and is expected to close in the second or third quarter of 2024.
This announcement follows Jefferies' recent divestitures, including the sale of Foursight Capital LLC to One Main Holdings, Inc. (NYSE:OMF), and Golden Queen to Andean Precious Metals (TXV:APM). As Jefferies progresses with reducing legacy investments, it will reclassify these assets under "Other investments" within its Asset Management segment in fiscal 2024. The company plans to continue operating HomeFed, its real estate development arm, while liquidating non-core assets.
Rich Handler, CEO, and Brian Friedman, President of Jefferies, expressed satisfaction with the company's direction, highlighting their intent to establish Jefferies as a top-tier global investment banking firm. They credited the firm's success to its workforce and strategic alliance with SMBC, which they believe positions Jefferies for further success in the coming years.
Jefferies, a global investment banking and capital markets firm, offers a range of services including advisory, sales and trading, research, wealth, and asset management. It operates over 40 offices worldwide, providing insights and expertise to clients across various sectors.
This news is based on a press release statement from Jefferies Financial Group Inc.
InvestingPro Insights
As Jefferies Financial Group Inc. (NYSE: JEF) maneuvers through strategic divestitures to concentrate on its core investment banking business, the company's financial metrics and market performance offer additional insights for investors. According to real-time data from InvestingPro, Jefferies has a market capitalization of $8.61B and is trading at a P/E ratio of 32.98 based on the last twelve months as of Q4 2023, indicating a high earnings valuation relative to its earnings. Despite a revenue decline of 21.38% during the same period, the company has maintained a strong gross profit margin of 75.56%, showcasing its ability to retain a high level of profitability from its revenues.
InvestingPro Tips highlight that Jefferies is expected to see net income growth this year, with analysts predicting profitability. The firm has also demonstrated resilience by maintaining dividend payments for 15 consecutive years, underpinning its commitment to shareholder returns. Additionally, with a dividend yield of 2.95% as of the latest data and a strong return over the last three months of 17.54%, Jefferies presents an intriguing case for both income and growth-oriented investors.
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