Calamos Asset Management to be taken private by its owner

Calamos Asset Management, one of the biggest money managers in Illinois, has agreed to be taken private by its longtime owner, founder and chairman, John Calamos, and its CEO, John Koudounis.

The Naperville-based company, which manages money through Calamos Investments on behalf of mutual fund investors and institutional investors like foundations, said in a statement that it reached an agreement in principle to be acquired by the two executives for $8.25 a share in cash. That price offers a 12% premium over the $7.36 closing stock price on Dec. 16.

The shares jumped $1.03, or 14%, today to $8.39 in midday trading, suggesting shareholders expect a higher price may ultimately be paid.

A spokesman for the company declined to make any Calamos executives available for an interview. In the statement, Mr. Calamos said: “I believe a fully private ownership structure will enable John Koudounis to focus on managing our business to his vision for our firm’s long-term growth.”

(More: Calamos Investments patriarch gives up CEO title)

The company went public in October 2004, selling 20 million shares of Class A stock at $18 a share while Mr. Calamos and his family kept control through ownership of Class B shares with more voting power.

The transaction is still subject to a “final negotiation,” the statement said. The company’s board formed an independent special committee to review the proposal after Mr. Calamos and Mr. Koudounis expressed interest in October and that committee “concluded unanimously” to pursue the deal, the statement said.

The business has largely been owned by the founder anyway, with Calamos Asset Management holding just 22.2% of Calamos Investments and the other 77.8% controlled by Mr. Calamos, his family members, and Mr. Koudounis through Calamos Partners.

The company has been struggling in recent years to halt a slide in its business. For the first time in years, its assets under management fell below $20 billion this year, declining to $18.5 billion as of Nov. 30. That’s down from $21.9 billion at the end of last year, and $26.5 billion at the end of 2013.

Profits have also been off. Net income fell every year for the past five years, dropping to $21.4 million last year, or about a third of the $70.8 million it earned in 2014, and down from $137.9 million in 2011. Revenue fell 8% last year to $230.9 million, also declining for the fifth year in a row.

As revenue and profits slumped, so did the company’s stock. Shares have dropped this year from a 52-week high of $10.07 reached last December in trading on the Nasdaq.

Mr. Koudounis was hired as CEO of Calamos Asset Management in March to jump-start the company’s growth. He was formerly a banker in New York as CEO of Mizuho Securities USA, a subsidiary of Japan’s second-largest bank. Mr. Calamos has continued to oversee investment responsibilities even after the Koudounis appointment.

The company has attempted to revamp management in the past. Co-chief Investment Officer Nick Calamos, a nephew of the founder, was replaced in 2013 by former Janus Capital CEO Gary Black, but he lasted less than three years and left the firm in fall of 2015.

Meanwhile, the company is also grappling with legal battles. A former executive, Gene Katz, sued in September in federal court in Chicago, alleging that the company fired him in retaliation for an email he sent to top executives outlining what he called “imminent risks to the company and its future.”

A New York couple who invested in one of the company’s funds sued it in federal court there, alleging that they were charged more in fees than institutional investors were for similar Calamos products. Their case survived a Calamos motion to dismiss in March and is slated for trial next year if it’s not settled sooner.