Liontrust extends GAM offer period deadline for third time

Liontrust has prolonged the deadline for its proposed takeover of Gam for the third time, a day after the Swiss fund manager urged investors to back the bid.

Having been due to conclude today, the main offer period is now set to close at 4pm on 23 August, almost a month after the original deadline of 25 July and following two previous extensions.

London-listed Liontrust has conditionally agreed to buy GAM in a £96million deal that would create a business holding £53billion of assets under management, and widen its fund range and asset class offering.

Proposed deal: London-listed Liontrust has conditionally agreed to buy GAM for £96million 

More than 80 per cent of the company’s shareholders approved the prospective transaction at a general meeting four weeks ago.

On Thursday, GAM called on its shareholders to vote for the acquisition at the same time that the firm revealed half-year underlying pre-tax losses accelerated to 22.5 million Swiss francs.

Chairman David Jacobs said the results ‘demonstrate the challenges which GAM faces, which are among the reasons why the board continues to recommend the Liontrust offer’.

But the takeover is being held up by several GAM investors, including Geneva-based financial adviser Bruellan and investment vehicle NewGAMe, which is backed by French telecoms tycoon Xavier Niel.

They claim the deal is lopsided, ‘undervalues’ GAM, and would not bring stability given Liontrust’s share price performance over the past couple of years.

Liontrust Asset Management shares have slumped by around two-thirds during that time as investors pull cash out of riskier funds. 

They were 1.3 per cent, or 8p, down at 619p on early Friday afternoon.

NewGAMe and Bruellan, who collectively own a 9.6 per cent stake in GAM, have put forward an alternative partial offer to buy 28 million GAM shares for £13.7million.

They released a ‘100-day plan for the GAM turnaround’ yesterday, which includes a capital injection of 25 million Swiss francs, appointing a new board and bringing the cost structure in line with assets under management.

John Ions, the chief executive of Liontrust, has responded with a letter to NJJ, the ultimate controller of NewGAMe via Rock Investments, describing the blueprint as ‘anything but a detailed proposition‘.

He claimed that GAM needs a minimum investment of 200 million Swiss francs in order to rebound to profitability and said Liontrust had been unable to have a ‘direct conversation’ with NewGAMe’s associates.

Ions went on to say that the offer period extension would give GAM shareholders the opportunity to ‘make a straight choice’ on the two proposals.