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GAM's Largest Shareholder Gives Green Light To Takeover

Tom Burroughes Group Editor London 14 July 2023

GAM's Largest Shareholder Gives Green Light To Takeover

The Silchester group has held a stake in GAM Holding since 2011. Its approval of the transaction with Liontrust Asset Management is a significant step in what has at times been a challenging process.

The investment group owning more than 17 per cent of GAM’s shares says it supports UK-listed Liontrust’s takeover of the Swiss business, bringing the deal closer to fruition.

Silchester International has told GAM Holding that, in recognition of the strategic review GAM has carried out and in the absence of viable alternatives, Silchester will tender its shares, about 17.3 per cent of GAM’s share capital, into the Liontrust Asset Management offer.

The group has held a stake in GAM since 2011, GAM said in a statement yesterday.

“This reinforces the fact that this is the only offer available to GAM shareholders,” David Jacob, chairman of GAM Holding, said. “We are convinced that the Liontrust offer provides the certainty of a path forward for all GAM stakeholders and expect that it will receive regulatory approval in due course.” 

As announced in May this year, Liontrust agreed to pay for the deal by issuing 9.4 million new ordinary shares. It expects that  GAM shareholders will own about 12.6 per cent of the enlarged firm once the deal is wrapped up.

The move has not been straightforward. Rock Investment SAS (part of the investor group comprising Newgame SA and Bruellan SA) asked GAM to consider firing its board and make other changes ahead of the proposed takeover.

GAM has been battling to recover since Tim Haywood, who managed the ARBF business, was suspended in 2018 amid claims of misconduct (he was subsequently dismissed). Clients pulled money out of the firm. GAM has also seen its fortunes hit by the selloff in global markets during 2022. In January 2023, GAM said it expected to report an underlying pre-tax loss of about SFr42.8 million ($46.5 million) in 2022, widening from a loss of SFr9.6 million a year earlier. 

The takeover proposal comes at a time when the asset management sector, pressured by compliance costs, volatile markets and changing investment models, is trying to build economies of scale and cut costs.

The offer period started on 28 June 2023 and is expected to expire on 25 July. 

The final results of the main offer period are expected to be published on or about 31 July and completion of the transaction is currently expected to take place during the fourth quarter of 2023, subject to the satisfaction or waiver of the offer conditions. 

GAM’s extraordinary general meeting is due to be held on 25 August 2023.

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