Liontrust extends offer period for £96m GAM takeover amid opposition
- Liontrust’s intended takeover of GAM would create a firm with £53bn of AUM
- GAM shareholders now have until 4 August to accept its proposed £96m deal
- Liontrust: New deadline would allow more time for ‘constructive discussions’
Liontrust has delayed the offer period deadline for GAM investors for a second time this week as the London-listed fund manager battles to get the deal over the line.
The FTSE 250 company’s intended takeover of the Swiss fund manager would create a business holding £53billion of assets under management while boosting its fund range and asset class offering.
Having already given GAM shareholders a four-day extension on Monday, it has now told them they have until 4 August to accept its proposed £96million deal.
Acquisition: Liontrust’s intended takeover of GAM would create a business holding £53billion of assets under management and boost its fund range and asset class offering
Liontrust said the latest deadline extension would allow more time for ‘constructive discussions’ between the parties.
It added: ‘Throughout this process, Liontrust has sought to create corporate and financial stability for GAM and do what is, in Liontrust’s view, in the best interests of all GAM’s shareholders, clients and employees.
‘Liontrust has always believed that its offer and strategy for ensuring the growth of the combined Liontrust/GAM group is the best way to achieve this.’
At a general meeting on 7 July, 84 per cent of the company’s shareholders voted in favour of the acquisition.
But the proposal has faced significant opposition from some major GAM investors, including investment vehicle NewGAMe, which is backed by French billionaire Xavier Niel, and Geneva-based financial adviser Bruellan.
They believe the offer ‘significantly undervalues’ GAM and have criticised Liontrust for being ‘one of the worst-performing stocks in the fund management sector over the past 12-24 months’, among other concerns.
Liontrust Asset Management shares have slumped by around two-thirds in the last two years as economic uncertainty has forced investors to pull cash out of riskier funds. They closed 2.9 per cent, or 19p, down at 654p on Friday.
NewGAMe and Bruellan, which collectively own a 9.5 per cent stake in GAM, have put forward an alternative partial offer to buy 28 million GAM shares for £13.7million.
The group has laid out a four-stage overhaul plan that it claims values GAM at more than twice the Liontrust deal and could boost the firm’s worth by up to fivefold over the next two to three years.
Proposals include hiring management with ‘skin in the game,’ reforming the alternatives and wealth management divisions, and paying greater attention to ultra-high net worth investors.
An extraordinary general meeting for GAM investors to vote on the Liontrust deal is due to occur on 18 August.
