Shares of Jefferies Group (NYSE:JEF) rose on Tuesday after reports that Japan’s Sumitomo Mitsui Financial Group is preparing plans for a possible takeover of the US investment bank.
Jefferies has indicated it is not interested in selling, CNBC reported Tuesday morning.
Jefferies stock gained as much as 2.7% in early trading following a Financial Times report citing unnamed sources that SMFG, Japan’s second-largest bank by assets, is exploring a potential acquisition.
SMFG has been deepening its ties with Jefferies in recent years. The Japanese lender increased its economic stake in the US firm to about 20% last year, while holding less than a 5% voting interest, according to reports. The two companies first established a strategic relationship in 2021, when SMFG acquired an initial 4.9% stake.
Jefferies, a major player in investment banking and capital markets, has faced investor scrutiny in recent months, with its shares down nearly 40% year-to-date.
Attention is also turning to the company’s upcoming earnings report on Wednesday afternoon. Analysts polled by FactSet expect Jefferies to post earnings per share of $0.89, up 56% from a year earlier, on revenue of $1.98 billion, representing 24% growth.
Forecasts also point to a strong performance in investment banking and capital management, with revenue in that segment expected to rise nearly 30%. Asset management revenue, however, is projected to decline by about 6%.
Jefferies has not publicly commented on the takeover speculation, while SMFG has also not confirmed any such plans.