Opponents of the sale of the Swiss fund company will have the opportunity to reshuffle GAM's board. But the deal may have effectively run its course by then.
At the beginning of the week, the investor alliance around the French billionaire Xavier Niel was foiled in its complaint to the Swiss Takeover Commission. Now, it is pushing through with a demand for an extraordinary general meeting at GAM, the Zurich-based fund house confirmed to finews.com.
The alliance said it holds 9.2 percent of the votes based on its shareholdings of GAM. Five percent of the voting rights are required to demand an extraordinary shareholder meeting.
Playing for Time
The plan of the investor group, represented by Rock Investments, Bruellan, and NewGAMe, is to appoint new members to GAM's board of directors who are in favor of opposing the takeover bid by Liontrust, rather than attempting a turnaround of the company. The alliance claims that there is value to be wrung out of GAM and why they are eager to turn it around. Conversely, the Board of Directors in its current form supports Liontrust's offer.
The gambit is the latest effort to keep all the pieces in play in the bidding war, although the timeline is playing against the alliance. The extraordinary general meeting would presumably be convened around August 16, but Liontrust is sending out the takeover prospectus tomorrow. After a cooling-off phase, the offer period begins as planned on June 26.
Fait Accompli
At that point, GAM shareholders will be able to tender their securities for Liontrust shares during 20 trading days. An extension of another 20 trading days, as well as additional deadlines for the exchange planned.
As a result, two-thirds of GAM shares may have already been tendered before August 16, and the ownership would be restructured. To what extent a new board of directors of the fund house, which continues to be a legal entity until it is delisted, could still torpedo the deal is unclear from today's perspective. The closing of the Liontrust takeover is expected in the fourth quarter.
Will Appetite Wane?
Liontrust shareholders could pose a greater threat to the deal at a general meeting on July 7 where shareholders will vote on accepting the deal or not. One potential sticking point is that Liontrust is paying for the purchase price with shares, making a capital increase necessary.
If the owners lose their appetite due to ever-new complications at the Swiss takeover target, the offer will collapse. An incumbent as well as a future GAM Board of Directors will be in an even more difficult position.
