KANSAS CITY, Mo. -- Mutual fund firm Janus Capital Corp. may be spun off from its railroad parent company during this year's third quarter, according to the plans of Kansas City Southern Industries.
Janus and its mutual fund sister, Berger Associates Inc., are the stars of the railroad company's asset management segment, which has a combined $78.3 billion in assets under management. Janus Funds hold $74.2 billion; Berger Funds contain about $4.1 billion.
The railroad is expected to request tax-free status for the spinoff from the Internal Revenue Service by the end of the month.
Kansas City Southern said last summer it wanted to separate its 100-year-old transportation business from its financial services business. Executives believe the separation will be a way for shareholders to fully realize the true value of Janus.
Kansas City Southern's stock, containing both the transportation and financial services segments, is trading at about $34 on the New York Stock Exchange. Analysts say Janus itself could command about half that price. During 1997 the assets of Janus and Berger increased 42%, about half of which was from net sales, the company reported.
Janus' $217 million in operating income was 60% of the railroad's total operating income in 1997. Janus contributed about 65% to total operating income in 1996.