An investor group controlling just over eight percent of shares in GAM is formally challenging Liontrust's all-share offer to take over the Swiss asset manager.
NewGAMe and Bruellan which make up an investor group controlling 8.4 percent of troubled Swiss asset manager GAM are challenging the decision of the Swiss Takeover Board (TOB) decision for Liontrust's offer to acquire it in an all-share transaction.
The key sticking point for the investors is that Liontrust can withdraw its offer should GAM fail to exit its fund management services business (FMS), according to a statement Wednesday.
«This condition makes the offer unfair to GAM's shareholders, needlessly favors the bidder, and is contrary to the principles of Swiss takeover law,» according to the statement. Therefore the TOB must remove that condition of sale regarding the FMS business.
No Consequences for Failure
If left in place, that «would allow Liontrust to profit from the upside of a potential sale while suffering none of the consequences of a failed divestiture, which GAM’s shareholders would bear in full,» the investor group said.
They also maintain that the condition is not consistent with Swiss takeover laws.
Shareholders in Limbo
Another issue for the investors is that under Liontrust's timeline, GAM shareholders have until August 11 to accept the offer, without receiving Liontrust shares in exchange before the end of the year or beyond. That leaves them in limbo where they cannot sell their shares, withdraw their acceptance or receive a competing offer.
Moreover, the TOB granted Liontrust exemptions where it can ignore trades carried out by one of its fund management subsidiaries before the offer announcement when establishing the minimum offer price or considering offering cash instead of all shares.
The investors say the TOB has no authority to exempt Liontrust from complying with minimum price requirements under Swiss takeover rules.
