Jefferies to Acquire Stake in Hildene; Morgan Stanley Upgrades Rating

Jefferies Financial Group (JEF) plans to acquire a 50% stake in Hildene Holding, which owns Hildene Capital, a credit-focused asset manager with assets under management exceeding $18 billion. This transaction aligns with Jefferies' strategy to enhance its credit origination and asset management capabilities. The deal coincides with Hildene's agreement to purchase SILAC, a fixed-indexed annuity provider, for $550 million, further expanding its market presence. Jefferies anticipates a $75 million pretax gain upon closing the deal, expected in the third quarter of 2026. In a related development, Morgan Stanley upgraded Jefferies Financial Group's rating to overweight from equal-weight and increased its price target to $78, citing improved expectations for capital markets, expanded partnership with Sumitomo Mitsui Banking Corporation, and reduced concerns related to First Brands exposure. Despite these positive outlooks, JEF's stock has declined 24.59% year-to-date.