The Switzerland-based investor group comprised of NewGAMe SA and wealth manager Bruellan has escalated its public opposition to Liontrust Asset Management’s proposed takeover of GAM.
The group, which owns 8.4% of the asset manager, has formally challenged the Swiss Takeover Board’s decision to approve the £96m acquisition.
The investors are calling for the removal of a key condition of the announced exchange offer which would allow Liontrust to withdraw its offer if a proposed exit of GAM’s fund management services business is not achieved.
They said: “This condition makes the offer unfair to GAM’s shareholders, needlessly favours the bidder and is contrary to the principles of Swiss takeover law. The condition 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.”
“From a technical perspective, the condition is also inconsistent with Swiss takeover law in that it is broadly worded, such that its satisfaction is in effect left to the discretion of GAM and Liontrust.”
NewGAMe and Bruellan also have concerns over the deal timetable, with a potentially significant gap between accepting the deal by 11 August and receiving the Liontrust shares offered being an issue for them.
“During that period, shareholders would not be in a position to sell their GAM shares, nor withdraw their acceptances, in the absence of a withdrawal right under Swiss law, nor receive a competing offer,” the investors said.
Another area of contention is the various exemptions the regulator has granted Liontrust, which according to NewGAMe and Bruellan, allow it to disregard trades carried out by one of its fund management subsidiaries prior to the offer announcement when establishing the minimum price of the offer and considering the need to propose a cash alternative to the all-share offer.
The Swiss Takeover Board is yet to respond to the challenge publicly.
