Mergers and spinoffs can get very confusing. Looks like Jefferies Group absorbed Quantex and later spun it off as ITGI, only to reacquire ITGI some years later in a convoluted merger involving multiple entities that resulted in ITG and JEF both listed on the NYSE.
ITG and Jefferies.
ITG began in 1986 with a simple, far-reaching idea, developed by some innovators at Jefferies, that technology could empower institutional investors. Originally developed as a means of facilitating block trading, "its value turned out to be much bigger than we had anticipated," commented Frank Baxter, Jefferies CEO at the time. In 1990, Jefferies bought Quantex and by 1994, this computer-based trading market was the largest intra-day matching system in the world. By the late 90s, the group was such a success, that it made sense to make ITG its own separate company.
In April of 1999, Jefferies Group, Inc. (NYSE: JEF) and Investment Technology Group, Inc. (NYSE: ITG) completed the planned spin-off of Jefferies & Company, Inc. and other subsidiaries, and the merger of ITG with the former Jefferies Group, now Investment Technology Group, Inc.
Through its wholly owned broker-dealer subsidiary, ITG Inc., ITG is the leading provider of technology-based equity trading services and transaction research to institutional investors and brokers. ITG services help clients to access liquidity, execute trades more efficiently, and make better trading decisions.
LOS ANGELES--(BUSINESS WIRE)--April 13, 1999--
Jefferies Group, Inc. (NYSE: JEF) today announced financial results for the first quarter ended March 26, 1999.
Total revenues for the first quarter of 1999 amounted to $200.1 million, compared to $203.4 million for the first quarter of 1998. Earnings before spin-off expenses, income taxes and minority interest amounted to $39.9 million, compared to $32.6 million for the first quarter of 1998, or an increase of 22%. Net earnings before spin-off expenses were $19.9 million versus $17.9 million for 1998, an increase of 11%. Earnings per share (diluted) before spin-off expenses were $0.83 on 23.5 million shares versus $0.77 on 22.9 million shares in the same period in 1998.
One-time expenses in connection with the planned spin-off (see below) reduced net earnings and diluted earnings per share by $3.3 million and $0.14 for the first quarter of 1999, and by $0.5 million and $0.02 for the first quarter of 1998.
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"Revenues from our brokerage businesses, assisted by exceptional gains from ITG, enabled us to achieve substantial increases in our operating earnings for the first quarter," said Frank E. Baxter, Chairman and CEO. "We accomplished this in the midst of a difficult underwriting environment. We continue to provide liquidity for our institutional clients and adapt to the opportunities in all the markets we serve", he added.
Planned Spin-Off and Related Impact on Quarterly Results
Jefferies Group previously announced plans to spin-off to its stockholders Jefferies & Company, Inc. and other subsidiaries of Jefferies Group (referred to in this press release as "New JEF"), and to thereafter effect a merger of Investment Technology Group, Inc. (NASDAQ: ITGI) with and into Jefferies Group. The merger will result in stockholders of Jefferies Group becoming direct stockholders of ITGI and Jefferies Group ceasing to be ITGI's parent company. Jefferies Group and ITGI have entered into definitive agreements for the merger and related transactions and have distributed proxy statements for special stockholders' meetings to approve the merger on April 20, 1999. The merger is expected to occur five business days following approval of the merger at the stockholders' meetings.
Expenses incurred in connection with the spin-off had a significant impact on operating results for the first quarter. Most of these expenses are anticipated to be non-deductible for income tax purposes. Assuming consummation of the spin-off, merger and related transactions, New JEF's results will include spin-off expenses as a component of discontinued operations (see Attachment A). The attached Consolidated Statements of Earnings for Jefferies Group footnotes the impact of spin-off expenses incurred during each quarter.
Attachment B to this Press Release contains a Pro Forma Consolidated Condensed Statement of Financial Condition for New JEF as of March 26, 1999.
Jefferies Group is an institutional brokerage firm and an investment bank that focuses on capital raising, research, mergers and acquisitions, advisory and restructuring services for small to medium-sized companies, and trading in equity and taxable fixed-income securities, convertible bonds, options, futures and international securities for institutional clients.
Through its wholly-owned, broker/dealer subsidiary, ITG Inc., ITGI is the leading provider of technology-based equity trading services and transaction research to institutional investors and brokers. ITG's services help clients to access liquidity, execute trades more efficiently, and make better trading decisions.
Further information regarding the planned spin-off, including historical financial data on both companies, can be found at Jefferies Group's website,
www.jefco.com and ITGI's website,
www.itginc.com.
This press release contains statements concerning the timing, structure and ramifications of the proposed spin-off and related transactions that are intended to be "forward-looking statements", as that phrase is defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which can be identified by the use of terms such as "plan", "anticipate", "will", "would", "expect", "estimate" or variations of such terms, may not occur as presently anticipated in the event necessary approvals are not obtained or are not obtained on acceptable terms or in the event of adverse developments in the market for Jefferies Group or ITGI securities or in securities markets in general. As a result, no forward-looking statement should be regarded as a representation by Jefferies Group, ITGI or any other person that the presently anticipated events will occur as described herein. -0-
Also see:
http://sec.edgar-online.com/1998/03/18/ ... ction6.asp