Less than a week after a public rejection, Dave Brown and his team have publicly revised their bid for their biggest acquisition target yet. Their revised offer is more heavily weighted towards cash.

David C. "Dave" Brown Victory Capital Holdings, Inc. Chairman, CEO

This morning, Brown, chairman and CEO of Victory Capital Holdings, Inc. (VCTR) [profile], unveils the San Antonio, Texas-based, multi-boutique asset manager's updated hostile takeover proposal for buying London-based Janus Henderson Group plc (JHG) [profile]. The move comes after JHG's board rebuffed VCTR's February 26 bid last Wednesday (March 11), recommending that JHG shareholders vote against it (and in favor of the December 22 proposal from Trian Fund Management, L.P. and General Catalyst Group Management, LLC, a bid already publicly accepted by JHG's board).

Ali Dibadj Janus Henderson Investors CEO, Board Member

Victory's revised bid, like its initial one, is about 16 percent higher than the General Catalyst-Trian bid, according to the Victory team. Yet the payment mix has changed, with Victory upping the cash portion of the offer from $30 per JHG share to $40 per JHG share (a 33.3-percent boost) while shrinking the stock portion (from 0.35 VCTR shares per JHG share to 0.25 VCTR shares per JHG share). Thus, the revised Victory proposal would give current JHG shareholders (including Trian, which already owns 20.7 percent of JHG) more cash, but dial down their ending VCTR plurality from 38 percent (under the initial Victory bid) to 31 percent (under the revised one).

"Victory Capital's improved proposal provides Janus Henderson shareholders meaningful upfront cash value, while allowing them to retain significant ownership in a stronger combined company positioned for long-term growth," Brown states. "We are encouraged by the positive response shareholders have proactively communicated to us about our prior proposal and believe it clearly provides superior value compared to the currently contemplated transaction."

In the revised proposal, and an open letter to the JHG board's special committee, Brown and his team also specifically address the concerns the JHG board raised last week when rejecting the initial Victory bid. They explain their confidence in gaining the support of both JHG's and VCTR's shareholders. They stand by their cost synergy estimates for the deal (and note that their committed financing isn't contingent on fully realizing those cost savings). They emphasis Victory's extensive experience as a serial acquirer and multiboutique. And they dismiss concerns about client support.

"We have a successful track record of acquiring and integrating large asset managers and retaining clients as well as investment professionals without disruption to the investment process or the client experience," Brown writes in the open letter. "In our precedent transactions, client consent percentages at closing were over 95% (compared to the 75% closing standard we propose). We have also retained key investment professionals in prior acquisitions." 

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