American Can Plans to Raise Jefferies Stake

American Can, which has been acquiring financial-services companies in recent years, is negotiating to boost its stake in Jefferies Group, a Los Angeles-based securities firm, to the equivalent of 20% from 9.8% now, the two firms announced Wednesday.

A Jefferies spokesman said that the increased stake would be for investment purposes only and that American Can has “no plans” to take over Jefferies, which has gained considerable attention on Wall Street by trading large blocks of stock for institutional investors in “third market” deals outside of stock exchanges.

Directors and officers of Jefferies control about 36% of the firm’s stock, according to the firm’s proxy statement last March, and employees overall own about 50%, making the prospect of a hostile takeover unlikely, the spokesman said. Chairman and Chief Executive Boyd L. Jefferies owns a 17% stake, according to the proxy.

Could Own 20% Stake

Under the proposed deal, expected to be hammered out within one or two weeks, American Can’s financial-services subsidiary, Associated Madison Cos., would acquire newly issued convertible subordinated debentures and common stock of Jefferies. If fully converted, American Can would own about 20% of Jefferies common stock.

The Jefferies spokesman said proceeds from the debenture sale would help it finance growing customer borrowing needs and larger block trades.

American Can acquired its initial stake for $20 million last April, when it bought a new issue of convertible subordinated debentures that, if converted, would give it 9.8% of Jefferies.

Greenwich, Conn.-based American Can has been shifting its emphasis from packaging and manufacturing to financial services since 1982. Its operations now include a mutual fund, insurance, institutional brokerage, mortgage banking and real estate syndication.

Jefferies earned $11.9 million last year on revenue of $106.7 million.