Liontrust extends bid period for £96m GAM takeover amid opposition
- Liontrust’s intended acquisition of GAM would create a company with £53 billion in assets under management
- GAM shareholders now have until August 4 to accept the proposed £96 million deal
- Liontrust: New deadline would allow more time for ‘constructive discussions’
Liontrust has postponed the offering period deadline for GAM investors for a second time this week as the London-listed fund manager battles to close the deal.
The proposed takeover of the Swiss fund manager by the FTSE 250 firm would create a company with £53bn of assets under management, while increasing fund and asset class offerings.
Having already been given a four-day extension on Monday, GAM shareholders have now told them they have until August 4 to accept the proposed £96 million deal.
Acquisition: Liontrust’s proposed acquisition of GAM would create a company with £53 billion in assets under management and increase fund and asset class offerings
Liontrust said the latest extension of the deadline would allow more time for “constructive discussions” between the parties.
It added: “Throughout this process, Liontrust has sought to create business and financial stability for GAM and to do what Liontrust believes is in the best interest of all of GAM’s shareholders, customers and employees.
“Liontrust has always believed that its offering and strategy to ensure the growth of the combined Liontrust/GAM group is the best way to achieve this.”
At a general meeting on July 7, 84 percent of the company’s shareholders voted in favor of the acquisition.
But the proposal has met significant opposition from some major GAM investors, including investment vehicle NewGAMe, which is backed by French billionaire Xavier Niel, and Geneva-based financial advisor Bruellan.
They believe the offer “significantly undervalues” GAM and have, among other things, criticized Liontrust for being “one of the worst-performing stocks in the fund management industry in the past 12-24 months.”
Liontrust Asset Management Shares have fallen by about two-thirds over the past two years as economic uncertainty forced investors to move money out of riskier funds. They closed down 2.9 percent, or 19 pence, on Friday at 654 pence.
NewGAMe and Bruellan, who together hold a 9.5 per cent stake in GAM, have made an alternative partial offer to buy 28 million GAM shares for £13.7 million.
The group has one revision plan in four phases that it claims to value GAM more than twice as much as the Liontrust deal and could increase the company’s value by up to five times over the next two to three years.
Proposals include hiring management with skin in the game, reforming the alternatives and asset management divisions, and paying more attention to high net worth investors.
An extraordinary general meeting for GAM investors to vote on the Liontrust deal will take place on August 18.