This investigation focuses on the pending merger between Janus Capital Group and the Henderson Group plc.
On October 3rd, the board of directors of Janus announced that it had entered into a merger agreement with Henderson. Under the terms of the agreement, shareholders of Janus will receive 4.7190 shares of Henderson for each share of Janus common stock. While billed as a merger of equals, Janus shareholders will own between 45% and 48% of the post transaction company.
The investigation concerns whether Janus’s board of directors failed to adequately shop the Company and obtain the best possible value for Janus’s shareholders before entering into an agreement with Henderson. Additionally, the investigation seeks proper and full disclosure of the material terms of the transaction and their effects to Janus shareholders.
The are several first blush issues:
Dai-ichi, the largest Janus shareholder, has committed to vote in favor of the merger. Post-merger, Dai-ichi will hold approximately 9% of the combined group and intends to further invest in the combined company to increase its ownership interest to at least 15%; To assist Dai-ichi in achieving its ownership ambitions, the parties have agreed, subject to the completion of the merger, to sell Dai-ichi options to subscribe for up to approximately 5% of new Janus Henderson Global Investors shares. Is this special treatment of this large investor fair to other Janus shareholders?
Post merger the current CEOs of both companies will act as co-CEOs of the new entity. These co-CEO structures do not last. What is the true plan for the long term management of the combined entity? Should that be fully disclosed? Are both CEOs signing new management contracts and if so will those contracts be disclosed during the shareholder vote?
What efforts did Janus’ board undertake to fully shop the company to other potential suitors?
If you own shares of Janus Capital, state law offers procedures to question the fairness of the pending merger. Feel free to complete the form on this web page to learn more.