Trading in Janus' shares has settled down after Monday's takeover rumors. Whether that is because the Denver fund firm is not actually in play, or because traders are waiting to learn more is not clear. An interesting aside to the story, though, is the rumored identity of a suitor for Janus.

Dow Jones' MarketWatch news site has named Franklin Resources as a possible suitor to Janus Capital.

On paper, a deal between the two firms would seem to make sense. Franklin has strengths in international products and value products. Indeed, both strengths were gained through acquisition -- first with the purchase of Templeton and then Michael Price's Mutual Series of funds. Janus would bring the San Mateo, California fund group its first prominent growth products.

Consultant Geoff Bobroff told the news organization that he agrees.

"One acquisition gave them emerging markets and international securities, the other gave them a strong base in value management," said Bobroff. "What they're missing is domestic growth."

The article also points out that a deal would free cash that now appears to be trapped on Franklin's balance sheet. The firm has roughly $2.5 billion in cash, including about $1.9 billion that is held oversees and is due to be repatriated.

If Franklin uses the cash to acquire another firm or reinvest it in its business, it would be able to pay a special low federal tax of 5.25 percent. On the other hand, if it uses the cash to pay dividends or buyback shares it faces the full tax rate.

Those tax rules, it seems, make any firm that is for sale look like a relative bargain for Franklin.  

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