GAM investor group demands EGM date change over Liontrust deal vote

A group of GAM investors has requested a delay to an extraordinary general meeting on Liontrust's takeover of the asset manager, so it can vote "with full knowledge of the outcome" of the deal.

Should GAM fail to announce publicly the re-scheduling of the EGM by 10 August, the group has said today (8 August) it will withdraw its already submitted proposals and request a new EGM to be held once the result of the Liontrust offer is known. 

These proposals include removing the existing board, replacing them with their own slate of directors, issuing a dilutive convertible bond and launching a special audit. 

The investor group comprises NewGAMe SA and Bruellan SA, which controls approximately 9.6% of the issued share capital of GAM Holding AG. 

The group wants to move the EGM to on or around 31 August, to reflect the extension of Liontrust's offer period.

Originally, the offer period was due to end on 25 July and has since been extended to 28 July, then 4 August, then 23 August. Liontrust originally announced its intention to buy GAM on 4 May.

In a letter addressed to GAM's board, the group highlighted the board's decision to bring forward the EGM date, from 25 August to 18 August, and Liontrust's decision to extend the offer period until 23 August.

It stated this move "prevents GAM's shareholders from drawing on the consequences of the expected failure of Liontrust's offer to make an informed choice about the future of the company", reports Investment Week.

The letter also addresses the "unsatisfactory" answers provided by GAM on 2 August to the questions that the group submitted on 7 and 15 June 2023. The group has asked GAM to complete the "inadequate responses" it provided on 2 August and raised nine additional questions

Antoine Spillmann, CEO and partner at Bruellan, and the investor group's proposed candidate for chairman of GAM's board, said Liontrust "does not have the support it needs to proceed with its acquisition of GAM".

The latest extension of the offer period to until 23 August "is intended to force shareholders to vote on NewGAMe's proposals before the result of Liontrust's offer is known", he added.

The group said it wants GAM shareholders to be able to make "an informed choice" about the future of the company

"Rather than acting in the best interests of the company, GAM's board of directors are playing with dates and deadlines to avoid being held to account by shareholders in case of a failure of the Liontrust offer," Spillmann said.

Liontrust issued a statement defending its position, noting two of the major proxy agencies, ISS and Glass Lewis, have both, with respect to GAM's extraordinary general meeting on 18 August 2023, recommended GAM shareholders back management and vote against NewGAMe's proposals.

Change in control approval

Liontrust received change in control approval from the Financial Conduct Authority in relation to its proposed acquisition of GAM, becoming controllers of GAM's UK regulated entities.

These are GAM Sterling Management Limited; GAM International Management Limited; GAM Unit Trust Management Company Limited; GAM London Limited; and GAM Systematic LLP. 

The approval from the FCA is "a major step forward" in satisfying the regulatory approval condition of Liontrust's offer for GAM, Liontrust said in a statement.

The proposed acquisition has also received no objection from Swiss regulator FINMA of the planned changes to the qualified participants of GAM Investment Management (Switzerland) AG, Zurich.

It has also received approval from the Central Bank of Ireland of the proposed change of ownership of GAM Fund Management Limited.  

Applications to the financial regulators in Luxembourg, Italy and Hong Kong are in progress and decisions are expected to be confirmed within the next three months. 

This article was first published on Investment Week