The story is an example of the twists and turns in a wealth sector M&A landscape that in some ways is proving more arduous than a few years ago, as interest rates have risen.

GAM Holding, which last week reported on how a takeover bid from the UK’s Liontrust Asset Management had failed, today said it has agreed with investment groups NewGAMe and Rock Investment SAS to extend immediate short-term financing of SFr20 million ($22.6 million) to cover GAM’s liquidity needs.

Rock is a French-incorporated entity that is owned by NJJ Holding, the personal holding company of Xavier Niel, a wealthy French businessman. It is part of the NewGAMe group of investors consisting of NewGAMe SA and Bruellan SA.

This short-term financing will remain until it is replaced by the proceeds of a convertible bond to be issued by GAM in an amount of about SFr25 million, Zurich-listed GAM said in a statement.

GAM said the creation of the conditional capital required for the issuance of the convertible bond will be proposed to GAM shareholders at an extraordinary general meeting that will be held on or around 27 September 2023.

The development comes less than a week after Liontrust said in a statement that its tender offer for GAM was likely to be unsuccessful. Liontrust’s takeover move for GAM, announced in April, had been a contentious process, criticised by investors who challenged the price and logic of the deal. 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 was also hit by the selloff in global markets during 2022. It reported interim 2023 financial results here. Its shares have slumped from SFr8.61 per share on 24 August 2018 to SFr0.48 on 28 August, 2023. 

When Liontrust and GAM commented on the failed tender offer late last week, shares in Liontrust surged and those of GAM rose less sharply. 

New board
At the upcoming EGM, Rock will also propose new directors for election to the GAM board. The current board members said they will stand down at the EGM once the new directors are elected. The current GAM Board recommends that shareholders approve the proposed board candidates of NewGAMe.

NewGAMe has requested that the GAM Board recommend shareholders to authorize the issuance of new shares at the upcoming EGM to enable the contemplated convertible bond and further share placements.

NewGAMe and Rock have confirmed to the current GAM board that they intend to secure sufficient financial resources to fund GAM's operations as a “going concern.”