Victory Capital revised its $8.6 billion cash-and-stock offer for rival Janus Henderson on Tuesday, ratcheting up efforts to derail the asset manager’s take-private deal with Nelson Peltz’s Trian and venture capital firm General Catalyst.
The proposal comes days after Janus rejected Victory’s earlier $8.6 billion offer with a lower cash component, saying the bid carried closing risk and was not superior to the existing $7.4 billion all-cash deal with Trian.
The bidding war for the $493 billion asset manager comes as the industry consolidates, fueled by the desire in boardrooms for a larger, global presence to attract investor cash.
Victory, which has made several buys in recent years, is now proposing $40 in cash and 0.25 of its shares for each Janus share. It had earlier offered $30 in cash and 0.35 of its shares.
“The $10 additional cash consideration per share in the improved proposal provides significantly greater certainty to Janus Henderson shareholders,” Victory said.
Janus said its special committee will evaluate the revised proposal and that the firm continues to recommend that shareholders vote to approve the Trian-led deal at the April meeting.
“I’d be surprised if Janus decides to turn down the revised Victory Capital deal,” said David Wagner, head of equity and portfolio manager at Aptus Capital Advisors, which owns shares in Victory.
“Victory has a tried and true, rinse and repeat, M&A playbook for acquisitions such as these, where managers retain significant autonomy. I’m not sure if that would be the case at Trian.”
In December, Janus had agreed to a buyout by Trian and General Catalyst after a five-year push by Peltz that began as an activist campaign.
Janus shares were up 2.4% on Tuesday while Victory shares rose 1.6%.
Trian and General Catalyst didn’t immediately respond to Reuters requests for comment.
VICTORY RESPONDS TO JANUS CONCERNS
Victory CEO David Brown said the firm didn’t agree with the risks associated with its proposal previously cited by Janus’s special committee.
Janus had last week cited several factors, including uncertainty in obtaining the required 75% consent among Janus clients and attrition risk given the bid’s synergy targets.
Victory said it is confident of achieving the 75% threshold, given its track record on its recent acquisitions. It also rebutted concerns on employee retention.
“In our precedent transactions, client consent percentages at closing were over 95%. We have also retained key investment professionals in prior acquisitions,” Victory said.
Source: Reuters.com