Investor group opposed to Liontrust buying GAM alleges asset manager spread ‘false

A war of words has erupted over the potential takeover of GAM, after a rebel investor group accused Liontrust of transmitting ‘false rumours and information’ to try and scupper their rival offer. 

It comes just a day before the deadline for the Swiss fund manager’s shareholders to accept GAM’s proposed acquisition by Liontrust Asset Management.

The £96million deal would create a business holding £53billion of assets under management and a more enhanced fund range and asset class offering.

Allegations: NewGAMe has accused Liontrust Asset Management of spreading ‘false rumours and information’ to try and scupper its proposed partial cash offer for GAM

But NewGAMe and Bruellan, which hold an estimated 10 per cent stake in GAM, have claimed the bid is lopsided, ‘significantly undervalues’ the company and contains unappealing execution contingencies.

They have put forward a partial counter-proposal that includes issuing a 25million Swiss francs (£22.3million) loan, electing a new board of directors, and increasing the share of high value-added investment products.

An email sent by Liontrust’s head of corporate development, David Boyle, on behalf of the firm’s chief executive, John Ions, to some GAM investors said that John Seo, the managing director of Fermat Capital, an external manager of GAM, had ‘questioned the integrity of NewGAMe.’

He added that the Fermat co-founder was ‘in no mind to lunge straight into a relationship with people he does not trust.’

As a result, Seo was ‘seriously thinking’ about ending Fermat’s relationship with GAM if the NewGAMe offer was successful.

But Albert Saporta, the chief executive of NewGAMe, has published a conversation between him and Seo where the latter described being ‘shocked and dismayed’ by the email.

Seo also asserted that he ‘never wrote those words, and… would never approve of those words’ and had contacted Ions, who vowed to ‘retract’ the email.

Saporta remarked: ‘With these emails, Liontrust is now disseminating false rumours and information in order to panic shareholders into tendering at the last minute.

‘As we should come to the end of this ordeal with the Liontrust tender deadline tomorrow, we are grateful to shareholders that have expressed support for our turnaround plan by seeing through GAM and Liontrust’s misleading statements and not tendering to this deal.’

A spokesman for NewGAMe confirmed the email exchange between the Seo and Saporta to This is Money.

Liontrust acknowledged the email sent by Boyle but would not comment on whether Ions had disavowed it.

Anthony Maarek, managing director of NJJ Holding, which oversees NewGAMe, has told Liontrust’s chairman, Alastair Barbour, in a letter that the Swiss Takeover Board has been contacted regarding the emails.

Maarek accused Liontrust of exceeding the ‘limits to what can be decently and legally be undertaken’ to persuade investors to accept a buyout bid.

Liontrust Asset Management shares were 1.2 per cent, or 7p, higher at 605p on late Wednesday afternoon, although they have plummeted by around 70 per cent in the past two years.

The company’s operating profits slumped by over a third to £49.3million for the 12 months ending March after its UK retail funds and managed portfolio service saw investors withdraw more funds from riskier asset classes.

Stock markets have taken a hit from rising economic uncertainty caused partly by central banks hiking interest rates to try and dampen inflation.