Liontrust’s takeover bid for Swiss asset manager GAM has fallen through, with 34% of the company’s shares being tendered into the offer by the final deadline of 4pm GMT yesterday (23 August).
The failed deal, in which Liontrust originally sought to acquire GAM’s entire issued share capital, has incurred an £11m one-off charge for the firm, which includes corporate finances, legal expenses and third party due diligence.
Liontrust required 66% of shares to be tendered by yesterday’s deadline for its offer to proceed.
The deal has been plagued by investor opposition since it was first announced, with investor group NewGAMe, which owns 9.6% of GAM’s shares, lobbying against the deal for several months and even launching its own partial takeover bid at a 29.1% premium to the Liontrust proposal.
Deadline
The deadline for the deal was extended three times in total. On 23 August, further scandal erupted when Liontrust CEO John Ions was accused by NewGAMe of “aggressive tactics which are bordering illegality” as the group lodged a complaint with the Swiss Takeover Board.
On the failed acquisition, Ions said: “Liontrust made a full and fair offer for GAM, which reflected the financial reality of the business and would have provided a certain and sustainable solution.
“Throughout this process, Liontrust has sought to create corporate and financial stability for GAM and do what is in the best interests of its shareholders, clients and employees. We have always believed that Liontrust’s offer and strategy for ensuring the growth of the combined group is the best way to achieve this.”
At the initial time of interest (3 May), GAM’s share price was at a 16% discount to its closing price. Its share price had fallen by 96% over five years to May, following a string of scandals and disputes.
Dissapointed
In an open statement on 24 August Ions added: “We were impressed by the quality, dedication and professionalism of everyone we met at GAM including the investment managers and distribution teams around the world.
“We wanted to give this talent the platform to flourish and were excited by the fantastic potential for growing the combined businesses through providing the investment managers with the necessary profile and enhancing support for distribution.
“We are disappointed we did not win the support of the majority of GAM’s shareholders and are grateful to those GAM and Liontrust shareholders who did back our offer. We also thank everyone at GAM for working so hard to make our offer succeed.”
Ions said he hoped GAM is “able to achieve a positive outcome for the business”.
“GAM presented the opportunity to accelerate Liontrust’s strategic objectives. While this is not the result we wanted, our strategy will not change, with a continued focus on expanding distribution and the client base, diversifying the product range, attracting talent and enhancing the investor experience. The financial health of the Liontrust business, power of our brand, excellent investment teams and strength of sales and marketing gives me great confidence we will achieve these objectives.”
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