Nelson Peltz Offers Incentives to Hedge Funds in Bid to Boost Investor Support

Janus Henderson Group Plc

Trian Fund Management LP has increased its bid for Janus Henderson Group Plc to a "best and final" $8 billion, valuing the London-based asset manager at $52 per share. This revised offer represents a 25% takeover premium, comparable to other asset-management deals.

Nelson Peltz, the billionaire activist investor, has been eyeing Janus since 2020 and has now taken preemptive action to secure the deal. The market had been anticipating a higher bid from Trian, but the new offer clears a symbolic $50-a-share hurdle and comfortably tops analysts' average 12-month target for Janus stock.

Victory Capital Holdings Inc., the rival bidder, had proposed a nearly $57 per Janus share deal based on its share price on Monday. However, Victory needs to address a long list of concerns set out by the Janus committee, including the potential impact of $40-a-share cash element on the combined company's debt and the resulting indebtedness.

Read also: Expert Portfolio Manager Raja Venkatraman Names Top Investment Picks for June 4

Janus shareholders would receive a minority stake in the Victory-Janus mash-up, which could lead to concerns about the impact of the suitor's $500 million of proposed cost cuts on the business. Victory would need to come up with a credible retention package for key staff and address the worry about debt by roping in financial support from a partner or strategic investor.

The market is wary of pushing Janus stock much above the new offer price due to the risk of a knife-edge vote when put to the target company's shareholders. Trian has sensibly taken preemptive action to avoid this scenario and secure the deal.