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Why Shares of Janus Henderson Fell Today

By Bram Berkowitz - Feb 4, 2021 at 5:16PM

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Shares traded down after one of the asset manager's largest shareholders announced it would be selling its stake in the firm.

What happened

Shares of British global asset management firm Janus Henderson Group (JHG 0.96%) plunged more than 8.8% on Thursday.

So what

The firm, which has more than $400 billion in assets under management, today reported diluted earnings per share (EPS) of $1.02 in the fourth quarter of 2020, up nearly 73% from the fourth quarter of 2019. Fourth-quarter earnings beat the consensus estimate. However, full-year earnings of $0.87 EPS fell nearly 61% from 2019.

A red arrow sloping downward

Image source: Getty Images.

Despite a better quarter, bad news followed the earnings release when one of Janus' largest shareholders, Dai-ichi Life Holdings Inc., announced that it would sell its 17% stake in the company to focus on its insurance business.

Dai-ichi and Janus will sell Dai-ichi's stake, which is valued at roughly $1 billion, in a secondary offering of common stock in which Janus intends to purchase up to $230 million in the offering, according to Bloomberg.

Now what

An analyst from Wells Fargo wrote in a research note that Dai-ichi's departure suggests Janus is likely not close to a merger or acquisition, as Dai-ichi would not have sold before an incoming transaction.

The fact that Janus is not close to a merger or acquisition does not likely bode well for the company. Many believe the asset management industry needs to consolidate in order to deal with higher expenses and lower management fees, and Janus has continued to see an outflow of client funds in recent years.

 

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Stocks Mentioned

Janus Henderson Group plc Stock Quote
Janus Henderson Group plc
JHG
$27.43 (0.96%) $0.26

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