TOKYO Dai-ichi Life (8750.T), Japan's largest listed life insurer, struck a deal to buy a stake of up to 20 percent in U.S. asset manager Janus Capital Group (JNS.N), the latest move by a Japanese financial company to counter slowing growth at home by expanding overseas.
Shares of Janus jumped more than 18 percent in premarket U.S. trading.
The deal could give a boost to Janus, a fabled stock fund manager of the 1990s that has lost its shine in the past decade after being involved in an industry wide mutual fund trading scandal and after suffering outflows from its funds over the past several years.
Based on the market price of Janus shares at Thursday's close, a 20 percent stake in the firm would cost about $300 million.
Dai-ichi and Janus said in statements on Friday that the Japanese company would acquire more than 15 percent but up to a maximum 20 percent of Denver-based Janus within a year from the market and by exercising stock options.
Janus has sold to Dai-ichi conditional options for the Japanese company to buy up to 14 million shares of Janus. The U.S. fund firm will buy back its shares to offset the share dilution from that transaction.
The financial details of the stake agreement were not disclosed.
Dai-ichi will take one board seat at Janus after acquiring a 15 percent stake.
Under the deal, Dai-ichi will also put $2 billion of its clients' assets under Janus' management and will sell the U.S. company's products in Japan through DIAM Asset Management, a joint venture between Dai-ichi and Mizuho Financial Group (8411.T).
Mizuho Securities and Evercore Partners were advising Dai-ichi. It was not immediately known who was advising Janus.
Janus, which had $152.4 billion in assets under management at June 30, has previously been the subject of takeover rumors. Bigger rival Franklin Resources (BEN.N) has in the past been talked about in the market as a suitor.
With weak growth prospects at home, Dai-ichi and rival Japanese life insurers have been exploring acquisition opportunities overseas both in life insurance and asset management.
Dai-ichi is also among bidders for ING's ING.AS insurance operations in Southeast Asia.
"We would like to consider further acquisitions if there are good deals in the area of asset management," a Dai-ichi spokesman said.
In January, Japan's largest life insurer, Nippon Life Insurance NPNLI.UL, agreed to pay $290 million for a 26 percent stake in the asset management unit of India's Reliance Capital Ltd (RLCP.NS).
(Additional reporting by Chikafumi Hodo and Aaron Pressman in Boston; Editing by Muralikumar Anantharaman)