Stock Price Plummeting 36% Attracts Japanese Investment? Sumitomo Mitsui Financial (SMFG.US) Reportedly Plans to Acquire Jefferies (JEF.US) Surges 15% on Pre-Market News

CNFINANCE APP has learned that, according to reports, Sumitomo Mitsui Financial Group (SMFG.US) is planning potential strategies to acquire the American investment bank Jefferies (JEF.US).

Buoyed by this news, Jefferies’ stock rose over 15% pre-market on Tuesday.

Citing sources, reports say that SMFG has formed a dedicated team to closely monitor Jefferies’ stock price movements to ensure quick action when the right opportunity arises. Since the beginning of this year, Jefferies’ stock has fallen more than 36%. Last year, the firm’s asset management-related subsidiaries were involved in the bankruptcy of U.S. auto parts supplier First Brands, which further drove down its stock price.

Jefferies has not immediately responded to requests for comment, and SMFG has also stated that it cannot comment at this time.

The report also notes that SMFG is unlikely to pursue an acquisition in the short term, and it is currently unclear whether Jefferies’ management is willing to sell the company during its low stock price period.

According to LSEG data, Jefferies operates as an independent investment bank competing alongside many top Wall Street firms, with a current market value of approximately $8.17 billion. In contrast, Sumitomo Mitsui Financial Group’s market cap is about $124 billion.

Previously, following the bankruptcies of UK lender Market Financial Solutions and First Brands, Jefferies’ credit standards and risk appetite have been under intense market scrutiny. Some investors have already filed lawsuits against the bank, accusing it of fraud and misleading investors into investing in funds related to First Brands. First Brands also has approximately $715 million in receivables owed by Jefferies’ Leucadia Asset Management that remain unpaid.