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Banking

Dawn raider's London hope: New York securities trader BoydJefferies applies for membership on the London Stock Exchange

Boyd Jefferies, US broker-dealer, pet hate of the New York Stock Exchange, now under sub-poena to give evidence in the Boesky case, does not let a little controversy stand in the way of his ambitions.

His firm, Jefferies and Company, pioneer of after-hours trading activity, is applying for membership of the London Stock Exchange at the very moment of a blazing row over its most audacious deal yet.

On Friday October 24 a Big Bang exploded in the middle of the fierce New York takeover battle for control of US Allied Stores. The Canadian bidder Campeau dropped a tender offer for Allied stock just before 9am. But less than 30 minutes later it picked up 48% of Allied, which, with earlier purchases, gave it control and apparent victory over the rival bidder, Edward DeBartolo.

The dawn raid was organised by Jefferies. Acting as agent, the firm took just a few phone calls to amass that huge chunk of shares from willing sellers among the professional arbitrageurs. The block trade on the Cincinnati Stock Exchange set an all-time record, over $1.7 billion, dwarfing similar cross trades on the Big Board. Allied immediately tried to persuade the courts to outlaw the trade, claiming that US laws on tender offers had been violated.

The episode shows why Jefferies has become the dealing house of choice for US takeover raiders like Carl Icahn and Irwin Jacobs.

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