NEW YORK, Sept. 01, 2016 (GLOBE NEWSWIRE) -- Leucadia National Corporation (NYSE:LUK) (“Leucadia”) and FXCM Inc. (NYSE:FXCM) (“FXCM”) today announced that they have completed the process of deepening their partnership, with Leucadia now holding a membership interest in FXCM’s operating entity, FXCM Group, LLC. (See below for a summary of definitive agreements.)
Rich Handler, Chief Executive Officer, and Brian Friedman, President of Leucadia, stated: "We are pleased to affirm our long-term commitment and investment in FXCM and are excited about our prospects for success. We look forward to our role as board members of FXCM Group, LLC, and we believe that, together, Leucadia and FXCM can further strengthen and expand the FXCM platform."
Drew Niv, Chief Executive Officer of FXCM, stated: "We are delighted that Leucadia has shown its commitment to FXCM by becoming a long-term partner. This partnership can bring many benefits to FXCM shareholders, clients, and employees. Leucadia’s financial strength and its skill and expertise – including the deep expertise available at Jefferies – make it the ideal partner to help FXCM to continue to grow our business."
About Leucadia
Leucadia National Corporation, with a $45 billion balance sheet as of June 30, 2016, and ratings of Baa3 (Moody’s)/BBB- (Standard & Poor’s, Fitch), is a diversified holding company engaged through its consolidated subsidiaries in a variety of businesses, including investment banking and capital markets, beef processing, manufacturing, oil and gas exploration and production and asset management. The Company also owns equity interests in businesses that are accounted for under the equity method of accounting, including a diversified holding company, real estate, commercial mortgage banking and servicing, telecommunication services in Italy, automobile dealerships and development of a gold and silver mining project. As of year-end 2015, Leucadia, through its consolidated subsidiaries and unconsolidated investee companies, employed approximately 35,000 full-time employees.
About Jefferies
Jefferies, with a $37 billion balance sheet as of May 31, 2016, and ratings of Baa3 (Moody’s)/BBB- (Standard & Poor’s, Fitch), is the world's only independent, full-service global investment banking firm focused on serving clients for over 50 years, and a leader in providing insight, expertise and execution to investors, companies and governments. Jefferies provides a full range of investment banking, sales, trading, research and strategy across the spectrum of equities, fixed income and foreign exchange, as well as wealth management, in the Americas, Europe and Asia. Jefferies Group LLC is a wholly owned subsidiary of Leucadia.
About FXCM Inc.
FXCM Inc. (NYSE:FXCM) is a leading provider of online foreign exchange (FX) trading, CFD trading, spread betting and related services. Our mission is to provide global traders with access to the world’s largest and most liquid market by offering innovative trading tools, hiring excellent trading educators, meeting strict financial standards and striving for the best online trading experience in the market.
Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. In addition, FXCM offers educational courses on FX trading and provides free news and market research through DailyFX.com.
Trading foreign exchange and CFDs on margin carries a high level of risk, which may result in losses that could exceed your deposits, and therefore may not be suitable for all investors. Read full disclaimer.
This release contains "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements about future results and performance, including future market share and expected financial results. It is possible that actual results may differ materially from the anticipated results indicated in these forward-looking statements. Please refer to each of Leucadia’s, Jefferies’ and FXCM’s most recent Annual Reports on Form 10-Ks for a discussion of important factors that could cause actual results to differ materially from those projected in these forward-looking statements.
Summary of Definitive Agreements
As described below, Leucadia and FXCM signed definitive agreements to amend the terms of their Amended and Restated Credit Agreement (the “Credit Agreement”), and to replace their Amended and Restated Letter Agreement (the “Letter Agreement”), each dated January 24, 2015, with, among other agreements, an amended Credit Agreement and a new Limited Liability Company Agreement
Principal Changes to the Credit Agreement
Principal Changes to the Letter Agreement and Entry into the LLC Agreement, Management Incentive Plan and Management Agreement
Long-term incentive program participants will receive their share of any distributions or sales proceeds while unvested. In addition, if a participant is terminated from employment other than for cause or due to a material breach of a restrictive covenant, he or she will receive either a non-voting membership interest in FXCM Group that entitles the participant to the same distributions he or she would have otherwise received under the incentive program or a lump-sum cash amount, as determined by the plan administrator in its sole discretion. If a participant is terminated from employment for cause or due to a material breach of a restrictive covenant, he or she would not be entitled to distributions following such termination and will forfeit all interests under the plan. A termination payment will also be paid upon any change of control of FXCM Group.
Old Waterfall | New Waterfall | |||
Amounts due under Credit Agreement | 100% Leucadia | 100% Leucadia | ||
Next $350 million | 50% Leucadia / 50% FXCM | 45% Leucadia / 45% FXCM / 10.0% FXCM Management | ||
Next $500 million | 90% Leucadia / 10% FXCM | 79.2% Leucadia / 8.8% FXCM / 12.0% FXCM Management | ||
All aggregate amounts thereafter | 60% Leucadia / 40% FXCM | 51.6% Leucadia / 34.4% FXCM / 14.0% FXCM Management |