Executives at Denver’s Janus Capital Group face an uphill battle in their reported bid to buy out shareholders and take the company private, analysts said Thursday.
A Fortune magazine article this week said the mutual-fund company was weighing an offer of $17 per share.
“We would view such a potential bid as a (relatively) best- case scenario,” said Mark Constant, an analyst with Lehman Brothers, in a report issued this week.
The report suggested, however, that Janus would need to sell its money-losing printing and graphics business and possibly its majority stake in Palm Beach Gardens, Fla.-based Intech, the quantitative investment company that has attracted huge investor inflows, to get the deal done.
Janus also would need to get employees to agree to lower pay to bring the “valuations back down to a more reasonable level,” the report said.
A deal at $17 per share is unrealistic, said Franklin Morton, senior vice president for Chicago’s Ariel Capital Management LLC, which owns 14.5 percent of Janus.
“It wouldn’t make any sense,” Morton said. “Just look at the stock price.”
On Thursday, Janus closed at $19.31, up 14 cents on the day. It’s up 51 percent from its 52-week low of $12.75 on April 29.
Fortune reported that discussions started in the summer, when Janus hired Morgan Stanley to advise on a potential buyout.
“A lot has changed since last summer,” Morton said, noting that Janus reported better third- quarter earnings and improved inflows. “This is a company that is improving quickly.”
Janus spokeswoman Shelley Petterson declined to comment Thursday, citing company policy against discussing “rumors and speculation.”
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
