Leucadia National Corporation - Gabelli Analyst Mac Sykes (4-9-2018)

Leucadia National Corporation - Gabelli Analyst Mac Sykes (4-9-2018)


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Today provided another example of financial engineering surfacing value in the public market place.

Leucadia National Corporation announced strategic transactions on its way to completing a transformation to a more pure-play financial services business.
The net effect will materially increase GAAP equity by $1.0bn to $31.00 per share.

Dubbed the mini-Berkshire Hathaway, Leucadia was founded by Ian Cumming and Joe Steinberg in 1980. Over-time the firm has engaged in a number of transactions and accumulated a diversified group of businesses including financial services firm, Jefferies Group.

Today the firm announced two major sales.
First, management is selling a 48% interest in National Beef to Marfrig Global Foods for approximately $900 million. National Beef is one of the largest domestic beef processing companies with approximately 13% market share. Leucadia acquired its current 79% interest in the company in 2011 and will retain the unsold balance.
In addition, the firm is selling its 75% interest in Garcadia back to its JV partner, the Garff Family for $475 million. Garcadia owns and operates 28 auto dealerships in California, Iowa, Texas and Michigan. Since 2006, Leucadia has cumulatively invested $320 million and received cash distributions of $400 million prior to the expected sale of $425 million.
Given the expected increase in cash and capital positions, Leucadia announced a doubling of the current repurchase authorization to 25 million shares. And as part of the transformation the firm will rename the company “Jefferies Financial Group” to more accurately reflect its future operating business.

Source: Gabelli TV (via YouTube)
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