Nelson Peltz’s Trian Fund Management and General Catalyst have upped their cash offer for Janus Henderson, heating up the bidding war with Victory Capital.
Trian and a group of investors led by General Catalyst said on Tuesday they had increased their all-cash offer to $52 (£38.8) a share, up from its previous offer of $49 at the end of year, valuing the British based firm at $8bn.
Trian and General Catalyst’s initially agreed to buy the firm for $49 a share, valuing the company at $7.6bn.
The increased offer comes after Texas-based firm Victory shocked the market by swooping in with a cash and share offer, valuing Janus at $8.6bn, and offering $40 per share, up from its previous offer of $30 in February.
Victory Capital said the $10 increase provides “significantly greater certainty to Janus Henderson shareholders”.
But Janus Henderson’s special board of advisers has thrown its support behind Trian and General Catalyst’s proposals, arguing the offer from Victory Capital was “not in the best interest” of the group or its shareholders.
Victory Capital hit back, claiming the combined company “would be highly diversified and better positioned to compete at scale”.
It added that under the merger agreement with Trian, it would be owned by a “newly created acquisition vehicle with no operating experience” and “offers no benefits of incremental scale”.
Trian already holds a 20 per cent stake in Janus Henderson.
Janus Henderson share price jumped 2.8 per cent in morning trading following the offer to $52.
Clashing over Janus
Earlier this week, Victory also criticised Trian for spreading “misinformation” over its offer, but the board warned there were “significant closing risks” in Victory’s bid.
It said that because of Trian’s large stake, “shareholder approval would face active opposition from a significant shareholder” and pointed to concerns surrounding Victory’s financial arrangements to fund the deal.
The committee said: “The purported headline price offered by Victory is illusory if that transaction never closes.”
It added that despite meeting Victory six times since its initial bid, it did not believe the firm’s proposal will ever be actionable, adding that “the definition of insanity is doing the same thing over and over again and expecting different results”.
Janus said that if a deal with Trian and General Catalyst was not completed by the end of June, it would pay an extra dividend of $1 a share every quarter between July until it closed.
Changing landscape
The bidding war comes amid a wave of consolidation within the asset management industry, as it continues to be slapped with higher costs and investors pulling money from actively managed funds for cheaper index-tracking alternatives.
Recently, US asset manager Nuveen snapped up London stalwart Schroders in a surprising £9.9bn deal, while Natwest purchased Evelyn Partners for £2.7m.
The deals have thrown the longevity of the UK industry into question and raised concerns of further consolidation.
Janus Henderson was formed in 2017, from the merger of US group Janus and UK-based firm Henderson Global Investors.
It manages nearly $500bn in assets.
Victory Capital was founded in 2013, following a managed buyout from Keycorp, and has $327bn assets under management.
In a press release issued on Tuesday, Janus Henderson confirmed its special committee received a “revised unsolicited non-binding proposal” from Victory Capital.
The release said the firm’s merger agreement with Trian “remains in full force and effect” and the board has not “withdrawn or modified its recommendation” that shareholders vote in favour of the approval of the merger agreement.
The shareholder vote is set for 16 April.
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