Sumitomo Mitsui to Triple Stake in Jefferies, Expand Alliance

By Robb M. Stewart

Japan's Sumitomo Mitsui Financial Group Inc. plans to triple its stake in U.S. investment bank Jefferies Financial Group Inc. as the pair expand their strategic alliance.

The companies said Sumitomo Mitsui and its affiliates intend to increase their interest in Jefferies to up to 15% with the purchase of shares and will designate one director to Jefferies board as part of a deal that will see their alliance broaden to future corporate and investment banking business opportunities, equity sales, trading and research.

The companies said they will combine U.S. equities and merger-and-acquisition efforts under Jefferies.

Sumitomo Mitsui, which in 2021 provided Jefferies $2.25 billion in financing and bought a roughly 2.5% stake, said it plans to increase its stake through direct and indirect open-market purchases of Jefferies' shares that will be exchanged for nonvoting preferred shares that will be mandatorily convertible into nonvoting common shares.

Jefferies said it expects to seek approval for the new class of nonvoting shares at a special shareholders' meeting in July.

In premarket trading, Jefferies shares were 9% higher after closing Wednesday at $30.28, down 7.6% so far this year.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

April 27, 2023 07:22 ET (11:22 GMT)

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