GAM calls on rebel investor to ‘accept the realities’ and back Liontrust takeover

Swiss asset manager GAM has called on shareholders to “accept the realities” facing the firm today as it issued a rallying cry for investors to back its takeover by London rival Liontrust.

Liontrust has faced a wave of resistance from shareholders since launching a £96m takeover swoop for GAM in May, with a group of investors including French tycoon Xavier Niel leading the resistance against the takeover.

The rebel group, known as NewGAMe, last week tabled an alternative CHF25m (£22.3m) loan facility from Rock Investments to GAM in the hope of bypassing the need for a takeover.

However, bosses today slapped down the offer and said the cash would not be enough to keep the firm afloat.

“GAM requests that Rock acknowledge and accept the realities relating to GAM’s financial position, if the Liontrust Offer is declared unsuccessful,” the firm said. 

“It is essential that Rock acknowledge and accept publicly that the level of funding needed to stabilise GAM is significantly higher than the net proceeds of the Rock proposed convertible bond (approximately net CHF 15 million) and is likely to be in-excess of CHF 100 million.” 

Investors’ failure to accept the weakness of the financial positions is “not reflective of GAM’s actual financial position and business performance”, GAM said in a statement to Rock.

The response marks the latest in a drawn out battle over the takeover since Liontrust launched its bid in May.

Liontrust has already backed down on a key condition of its offer for Swiss rival GAM after facing resistance from a rival group of shareholders on its offer.

In a reversal of its initial offer, Liontrust dropped the requirement that GAM sell its loss-making fund management solutions before any takeover went ahead.

A final deadline for the deal has been pushed back to this Wednesday for a deal. NewGAMe has been contacted for comment.