Liontrust Asset Management has demanded GAM repay an £8.9m loan it made to the Swiss asset manager, plus interest.
Liontrust’s protracted attempt to acquire GAM came to an unsuccessful conclusion last week after it failed to secure sufficient backing of GAM shareholders, with just 33% of shares tendered into the offer.
The asset manager has confirmed there will not be an additional acceptance period for the offer and the matter is settled.
As a result of the bid failing, Liontrust now has the right to receive full repayment of the loan made to GAM on the basis that it would acquire the Swiss firm. The deadline is 30 days from now, Liontrust said.
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GAM’s future path is uncertain at this stage. The investor group which led the opposition to Liontrust’s bid, NewGame, has today confirmed interim financing for the asset manager.
Rock Investment, part of the group, has pledged CHF 20m (£18m) in short-term financing. The plan is for this to be replaced by the proceeds from issuing a convertible bond of the same value.
Liontrust has claimed these proposals are inadequate to keep GAM financially sound, with the firm needing around CHF 100m (£90m) in its opinion.
NewGame has also proposed a new board of directors, and stated its intention to “secure sufficient financial resources to fund GAM’s operations as a going [sic] concern”.
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Antoine Spillmann, CEO and partner at Bruellan and the investor group’s proposed candidate for chair of GAM’s board, said: “As a result of our productive discussions with GAM’s board and management over the past few days, we have a clear path forward. We have agreed to provide immediate funding of CHF 20 million and committed to secure additional financial resources to fund GAM’s operations.
“We welcome GAM’s decision to support our proposed directors and the agreement of the current board to step down once our candidates have been elected. Today is a pivotal step in the turnaround and enhancement of one of the industry’s iconic asset management firms.”
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