Jefferies Financial Group Inc. Agrees to Acquire Remaining 30% Interest in HomeFed Corporation

Jefferies Financial Group Inc. (NYSE:JEF or Jefferies), which currently owns approximately 70% of the outstanding shares of common stock of HomeFed Corporation (OTCMKTS:HOFD or HomeFed), a developer and owner of residential and mixed-use real estate properties primarily in California and New York, announced today that the Board of Directors of Jefferies and the Special Committee of the Board of Directors of HomeFed have approved a definitive merger agreement under which Jefferies will acquire the shares of HomeFed common stock that it does not already own. Under the terms of the transaction:

• HomeFed stockholders will be given the right to elect to receive either cash or shares of Jefferies common stock in exchange for their HomeFed shares.
• If a HomeFed stockholder elects to receive cash, that stockholder will receive $38.00 in cash for each share of HomeFed common stock.
• If a HomeFed stockholder elects to receive shares of Jefferies’ common stock and the Jefferies’ average share price (as defined below) is equal to or less than $21.00 per share, that stockholder will receive two shares of Jefferies common stock for each share of HomeFed common stock.
• If a HomeFed Stockholder elects to receive shares of Jefferies’ common stock and the Jefferies’ average share price is more than $21.00 per share, that stockholder will receive less than two shares of Jefferies common stock for each share of HomeFed common stock, with the exchange ratio being calculated by dividing $42.00 by the Jefferies’ average share price. For example, if the Jefferies’ average share price is $22.00, the exchange ratio would be 1.9091 and any HomeFed stockholder electing to receive shares of Jefferies’ common stock would receive 1.9091 shares of Jefferies common stock.
• If a HomeFed stockholder makes no election, that stockholder will be deemed to have made a cash election if the Jefferies’ average share price is equal to or less than $19.00 per share or a share election if the Jefferies’ average share price is more than $19.00 per share.

The Jefferies’ average share price shall be calculated as the volume-weighted average price of a share of Jefferies common stock for the ten consecutive trading days ending on the trading day that is three trading days before the date of the HomeFed stockholders meeting at which HomeFed stockholders will vote on the transaction.