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Janus parent gets its way
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June 16, 2000: 1:23 p.m. ET
Kansas City Southern gets board and SEC approval to spin off Stilwell
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NEW YORK (CNNfn) - After many months of contention and delays, the spin-off of Janus funds and the other financial service businesses of Kansas City Southern Industries appears to be going as the railroad company planned and should be completed in July.
The Kansas City, Mo.-based KCSI (KSU: Research, Estimates) said Thursday its board of directors approved the spin-off of Stilwell Financial Inc., which includes KCSI's four financial units: Janus, Berger mutual funds, Nelson Money Managers, and DST Systems.
The company also said the Securities and Exchange Commission has cleared the way for the spin-off to proceed by declaring effective its Form 10 Registration Statement, a document dealing with how KCSI reports its ownership of Janus in connection with the spin-off.
"The separation of KCSI's financial services and railroad businesses will realize shareholder value by creating two pure investment opportunities with their own resources, management teams and business strategies," KCSI Chairman and CEO Landon H. Rowland said.
The spin-off was awarded tax-free status, a fact that saves shareholders and KCSI "billions of dollars" in tax liability, said company spokesman Michael Herley.
Janus 'disappointed'
The spin-off has not occurred the way Janus had hoped. The fund family, which accounts for the bulk of Stilwell's revenue, made it clear over the past several months that it wanted to be spun off on its own.
"There's a little bit of disappointment," Janus spokeswoman Shelley Grice said.
Janus wanted its independence for at least three reasons, she said.
First, the company believes an independent Janus would have maximized shareholder value even further for both KCSI and Janus. Secondly, she said, the ability to give Janus equity directly to the fund company's employees "would align their best interests with those of the shareholders." And third, Janus would have preferred more control over its own money so it could be spent to enhance Janus' services, "not to subsidize our competitors," Grice added, noting that as a holding company Stilwell may acquire other fund firms.
There had been concern that if Janus did not get its independence, it would lose some of its managers. But Grice said she has not heard any talk of such departures, adding, "It's business as usual."
What the spin-off means to investors
Kansas City Southern shareholders will receive two shares of Stilwell for each KCSI share held as of June 28. The distribution will be made July 12.
Stilwell will list its common stock on the New York Stock Exchange and trade under the symbol SV, KCSI said.
About 222.8 million shares of Stilwell will be distributed.
Kansas City Southern shareholders previously approved a one-for-two reverse stock split to be effective upon completion of the spin-off. That split will shrink outstanding shares of KCSI to 55.7 million. 
-- from staff and wire reports
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