Entrepreneur Marco Garzetti's Taure AG alternative offer to Liontrust' Asset Management's bid for GAM Holding AG in hopes of keeping the Swiss group independent, has been rejected due to "materially" undervaluing the firm.
In a statement on Friday (19 May), the firm confirmed it had rejected the offer from Taure AG on May 3 as the offer did not eliminate the significant risks of GAM remaining an independent firm and was not in the best interests of all other stakeholders.
Earlier this month, Liontrust conditionally agreed to acquire GAM in a deal that values the struggling asset manager at CHF 107m (£95.7m). The offer valued each GAM share at CHF 0.68, alongside proving two loan facilities worth up to £17.8m from 4 May 2023.
According to the statement, GAM said Taure AG's offer would value each GAM share at CHF0.26, more than two and a half times less than the value offered by Liontrust.
"The offer from Liontrust has been well received by clients and is strongly supported by GAM's portfolio managers which enables GAM to move forward with stability as part of a combined business with Liontrust," said GAM chair David Jacob.
According to Reuters, Garzetti's Taure Invest AG, which was set up for the purpose of investing in GAM, said on Friday that Liontrust's offer undervalued the company and would lead to its breakup, and involved "significant execution risks".
"Marco Garzetti and his colleagues remain prepared to make a financial and personal commitment should GAM shareholders be interested in exploring a valid alternative to Liontrust's offer," the firm said in a statement.
Taure AG's offer was for GAM to issue 340 million shares to Taure AG at a subscription value of CHF 34m (£30.4m), resulting in them becoming the majority shareholder in GAM with 68% of the resulting shares in issue.
The offer also included a loan of around CHF 31m (£27.7m), which would not have been available until GAM shareholders had approved their offer and the election of a new GAM board, Liontrust said.
Investor group challenges Liontrust's valuation of GAM
"Based on Taure AG's proposed offer and GAM's closing share price of CHF 0.606 today, the implied value to existing GAM shareholders would have been CHF 0.26 per share including the CHF 34m subscription proceeds," the board said.
The investor group comprising NewGAme and Xavier Niel's Bruellan - holding around 8.3% of the issued share capital in GAM - also challenged Liontrust's offer for the company.
The group said the deal undervalues the firm and does not reflect the "significant upside that a successful turnaround would generate" for current shareholders.
It also hit back at the UK asset manager's lack of a share offer, arguing that this will subject GAM shareholders to the volatility of Liontrust shares "without any firm price for a business that has significant intrinsic value".
