Share options in Janus Capital Group Inc., the Denver-based fund company struggling to reverse investor defections, were set at a 33 percent premium to the price before a deal was announced to sell a minority stake to Tokyo-based insurer Dai-ichi Life Insurance Co.
Dai-ichi, which agreed Aug. 10 to purchase between 15 percent and 20 percent of Janus shares within one year, will pay $10.25 a share if it exercises the options, according to a regulatory filing. The insurer bought about 743,531 shares, or 0.4 percent of Janus shares in the market in the past week, at an average price of $8.42, according to the filing.
“It doesn’t mean they have to exercise that option,” Michael Kim, an analyst with Sandler O’Neill & Partners LP in New York. “They have the flexibility to buy the entire 15 percent through the open market.”
Janus Chief Executive Officer Richard M. Weil, a former executive at Pacific Investment Management Co., the bond-fund manager co-founded by Bill Gross, is partnering with Dai-ichi Life as falling markets and client withdrawals erode assets and the fees charge for overseeing them. Janus lost 47 percent of its market value over the past three years through Aug. 9.|
Janus rose 0.2 percent to $8.46 at 9:46 a.m. in New York trading. The stock advanced 34 percent this year, compared with the 13 percent gain in the 20-member Standard & Poor’s index of asset managers and custody banks.
Dai-ichi, Japan’s second-largest life insurer, also agreed to invest $2 billion into Janus funds and help distribute them in Japan.