NEW YORK (Reuters) - Jefferies Group Inc
The New York-based investment bank priced 20.6 million shares at $24.25 each, a 3.5 percent discount to its closing price on Wednesday.
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Jefferies said late Thursday afternoon that it planned to raise $500 million in the offering. It was not immediately clear why the company did not raise the full amount.
Jefferies is preparing to purchase a large trading operation from Prudential Financial Inc
After the deal was announced, Jefferies shares came under pressure, dropping as much as 2.9 percent and finishing down 1.6 percent at $24.71. The shares were off 0.7 percent at $24.55 Friday morning.
Ticonderoga Securities analyst Douglas Sipkin estimates the equity raise and acquisition will dilute Jefferies shareholders by 1 percent to 7 percent, depending on the earnings Bache can deliver.
Bache reported pre-tax earnings of $17 million in 2010 on revenue of $220 million.
Though Sipkin expects Jefferies shares to remain under pressure in the near term, he thinks the equity raise is a good move because it de-levers Jefferies' balance sheet and increases book value.
(Reporting by Lauren Tara LaCapra; editing by John Wallace)