Leucadia To Sell 48% Of National Beef; To Sell All Equity Interest In Garcadia

(RTTNews) - Leucadia National Corp. (LUK) reported preliminary estimates for the first quarter 2018. The company estimates that, based on current calculations, it will report quarterly income before income taxes of $100 - 115 million, and net income attributable to shareholders of $120 - 131 million, or $0.32 - 0.35 per share.

Leucadia also announced strategic transactions involving several of its investee companies, a proposal to change the name of the corporation to Jefferies Financial Group Inc., and a new share buyback authorization. The company has entered into a definitive agreement to sell 48% of National Beef to Marfrig for approximately $900 million in cash, reducing Leucadia's ownership in National Beef to 31% and allowing Leucadia to deconsolidate National Beef and simplify Leucadia's income statement and balance sheet. The estimated pre-tax gain that will be recognized as a result of the transaction is $800 - 850 million.

Leucadia has also agreed to sell 100% of its equity interests in Garcadia and its associated real estate to Leucadia's current partners, the Garff family. The sale price for Leucadia's interests, based on a $675 million enterprise valuation, is a net $425 million, payable $375 million in cash and $50 million in redeemable preferred equity. Leucadia will recognize a pre-tax gain of about $220 million. The transaction is expected to close in the third quarter of 2018.

Leucadia said its Board will ask shareholders at the upcoming Annual Meeting to change the holding company name of Leucadia National Corporation to Jefferies Financial Group Inc. Jefferies Financial Group Inc. will be a diversified financial services company engaged in investment banking and capital markets, merchant banking, and the early stages of building an alternative asset management platform.

The company said it is reviewing the feasibility of changing fiscal year-end to November 30th to simplify and harmonize periodic reporting by the consolidated enterprise and Jefferies Group LLC. The company noted that, in any event, Jefferies will continue to be a separate SEC reporting company.

Leucadia's Board has approved an increase to the company's share repurchase program to 25 million common shares from the 12.5 million remaining under its prior authorization.