A recently formed investor Group is unhappy with Liontrust's buyout plans for GAM is now taking the fight to a new level. The group is expanding its holding of GAM shares in its tussle with Liontrust.
NewGAMe and Bruellan together as a Group control just over eight percent of the share capital of troubled Zurich-based asset management from GAM, and have notified the Swiss regulatory authority Finma of their intention to increase their holdings above ten percent, according to a statement from Newgam on Tuesday.
The purchase of the additional shares is presumably being done to give the investor group more clout in its fight against Liontrust which in early May announced it would take over GAM by offering Liontrust shares. GAM management accepted the offer, but the investor group said it «significantly undervalues» GAM and does not reflect the upside potential of the shares.
Surpassing a Threshold
Under Swiss Law, a person or company holding over ten percent of a fund management company is required to inform the Swiss Financial Market Supervisory Authority (Finma). The Group has now done that.
GAM, once Europe's largest fund management firm, suffered a series of setbacks in recent years. When the Liontrust deal offered to fully buy out GAM, its chairman David Jacob said «Our choice of a strategic option was informed by the need to address the interests of all our stakeholders.» The move is supported by nearly 20 percent of its shareholders, and management.
Not so Fast
The selling of the fund management business is a key sticking point for the investors because Liontrust can withdraw its offer should GAM fail to exit its fund management services business (FMS).
The investor group is challenging the decision of the Swiss Takeover Board (TOB) decision for Liontrust's offer to acquire it in an all-share transaction.
«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.
Stay tuned.
