GAM urges investors to back takeover by FTSE 250 fund manager Liontrust after shareholder group attempt to sink deal and oust board
- Deal values GAM at £94 million with offer period running from June 28 to July 25
- Newgame and Bruellan called the offer “insufficient” and urged investors to reject it
Swiss fund manager GAM has urged investors to support Liontrust’s acquisition after a group of shareholders rioted against the deal last week.
FTSE 250-listed Liontrust, which announced talks in April, released its acquisition prospectus on Tuesday, revealing a bid period from June 28 to July 25, with the deal expected to close in late 2023 if approved by shareholders .
The deal, which valued GAM at around 107 million francs (£94 million), has come under fire from a group of investors who own 9.2 percent of the Swiss company’s shares.
GAM’s board is under pressure from investors over Liontrust’s takeover bid
A group made up of Newgame and Bruellan called the offer “inadequate,” arguing it “significantly undervalues” the company and criticized the exclusion of GAM’s fund services arm, which will be redeemed as part of the deal.
The pair said co-investors would have to reject the Liontrust deal and, if they do, GAM’s board would have to be ousted and replaced with a bunch of “veterans” of their choosing.
But GAM’s board, which has agreed to offer its shares in the offer, said on Tuesday it “strongly” recommends investors support the Liontrust offer, adding that the rebel group’s request for an extraordinary general meeting in August ‘does not constitute a competitive bid’.
Chairman David Jacob added: ‘The Board believes that Liontrust’s offer is in the best interest of all stakeholders and will create the stability needed to continue to deliver to customers.
“Our portfolio managers have indicated strong support for the offering and we have received positive feedback from many clients.
“At the conclusion of the proposed transaction, the resulting company will have a strong balance sheet, a strong Swiss presence, a broader range of excellent investment products and a global distribution footprint from which growth can be achieved, in which our shareholders can participate. the future.’
Liontrust boss John Ions said on Tuesday the deal would “benefit the clients, shareholders and employees of both asset managers.”
He added: “We believe our proposed acquisition of GAM can create long-term value for the clients and shareholders of both asset managers.
“In our opinion, Liontrust has made a good offer for GAM and has demonstrated why the acquisition works for all parties.”