Liontrust has waived the condition requiring GAM to sell its fund management services (FMS) business from the proposed takeover bid.
An agreement for the sale of the Swiss asset manager’s FMS business to Carne Group was announced on 29 June, but will no longer be required for the Liontrust takeover to go through.
Liontrust has also extended the main offer period by three days to 28 July. The firm said this is so GAM shareholders have time to weigh up the waiver of the FMS condition and the rival offer from NewGAMe for 17.5% of the firm.
‘Full and final’
On Friday (21 July), Liontrust announced it would not increase its CHF 71m (£63.3m) offer for GAM despite pressure from investor group NewGAMe and Bruellan.
In an open letter on Thursday (20 July), NewGAMe director Albert Saporta urged GAM shareholders to hold-off on tendering shares in support of Liontrust’s offer, which he labelled as “ridiculous”.
He told shareholders that Liontrust may have to extend the tender period beyond 25 July and “bump” its takeover bid.
See also: Another major GAM investor opposes Liontrust deal despite £20m loss forecast
Saporta also reaffirmed the group’s view that the offer falls short of GAM’s true value.
He said: “This is not a ‘fair’ offer. It is even significantly below the lowest point in the range of values – CHF 0.54–1.16/share (£0.54-£1.04) – identified in the Fairness Opinion commissioned by GAM’s board.”
Saporta added that he believes the present value of GAM is at least CHF 115-230m (£103m-£207m), rather than Liontrust’s CHF 71m (£63.9m) offer.
Liontrust responds
Liontrust then issued a statement of its own, saying the offer currently on the table is full and final.
The asset manager said the “good and fair” offer takes into account the “current financial run rate losses of GAM – including its regulatory capital position, its lack of free cash and its need for external financing and its future contractual liabilities, as well as the significant restructuring costs required to bring GAM to break even as quickly as possible”.
“It is imperative that the future of GAM is resolved as quickly as possible to provide immediate financial and corporate stability for GAM to preserve value for shareholders and give certainty to clients.
“There is no other offer for the entire issued share capital of GAM and the proposed acquisition provides a corporate resolution without further uncertainty and instability.”
Earlier this week, NewGAMe and Bruellan tabled a partial cash offer for 28 million GAM shares at CHF 0.55 (49p) each.
This represents a 29.1% premium on the value of the Liontrust offer which they are seeking to scupper.
NewGAMe and Bruellan’s calculation is based on Liontrust shares being priced at £6.43 on 17 July 2023 and a GBP/CHF exchange rate of 1.1251.
The investor group already owns around 9.6% of GAM and if the offer becomes fully subscribed they would own another 17.5%, bringing the total to 27.1%.
