Published: Tue, October 04, 2016
Economy | By Melissa Porter

Janus Group to Merge With Henderson

Janus Group to Merge With Henderson

"The organic growth strategy is hard and slow particularly in today's environment, so if you want to take significant step in terms of growth quickly it's your only option".

Henderson's shares surged as much as 20.2 percent, the most since January 2009, and were trading at 266.7 pence at 1 London.

Janus Henderson Global Investors' AUM by region on a pro forma basis will be approximately 54% US; EMEA 31% and the Pan Asian region 15%.

The combination, which will leave the United Kingdom company's shareholders owning 57% of the enlarged group, will create a company with more than $320bn assets under management and is expected to complete in the second quarter of 2017.

The merger is expected to be completed in the second quarter of 2017, subject to shareholder and regulatory approval.

Henderson shares closed 17 percent higher, while Janus shares were last up 13 percent on the New York Stock Exchange.

After the European Union referendum, Henderson was hit by outflows from its property fund, prompting its suspension, along with many others in the industry.

Formica said talks with Janus started in February, before the British vote to leave the European Union which saw investors pull more money from United Kingdom funds than any equivalent period in the global financial crisis.

Formica said talks with Janus had begun at the start of the year and there had been no other parties in consideration. The business will be headquartered in London.

The companies are targeting annual run-rate net cost savings of at least $110 million weighted to the first 12 months following completion and expected to be fully realized three years post completion.

One of Britain's largest investment managers is set to join forces with an American rival to create a $6 billion NY and Sydney-listed business employing more than 2,000 staff around the world.

Janus' largest shareholder, Dai-ichi Life, has also lent its support.

Janus Capital (NYSE:JNS) and Henderson Group (OTCPK:HNDGF) have set a "merger of equals," creating a combined company with a market value of $6B.

The firm plans to list itself on the New York Stock Exchange and will be led by Mr. Formica and Dick Weil, who will relocate to London from Janus's current headquarters in Denver.

This might help explain how Henderson's shareholders will end up owning about 57% of the combined group even though it is bringing less than 40% of the existing assets and less than 50% of the combined earnings before interest, tax, depreciation and amortization, according to Barclays.

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