A cohort of GAM shareholders have raised further concerns to the Swiss Takeover Board regarding Liontrust Asset Management's agreement to by the former firm.
An investor group comprised of NewGAMe SA and Bruellan, which has an approximately 8.4% collective stake in GAM, said it was concerned about the timetable of the proposed takeover and the "various exemptions" Liontrust had been granted in the deal, both factors the group felt could be disadvantageous to GAM shareholders.
Liontrust agreed to purchase Swiss-based GAM for CHF 107m (£96m) last week (4 May) and under the current timetable, GAM's shareholders would have until 11 August to accept the deal.
Investor group challenges Liontrust's valuation of GAM
However, the group said that even if the offer was accepted by that date, GAM's stakeholders may not receive the Liontrust's shares offered in exchange before the end of 2023 or beyond.
Liontrust offered 0.06 shares of Liontrust per GAM share, valuing the Swiss company at CHF 0.7 per share in the outline of the deal.
According to the NewGAMe group, shareholders "would not be in a position to sell their GAM shares, nor withdraw their acceptances (in the absence of a withdrawal right under Swiss law), nor receive a competing offer)".
GAM shareholders urge board to remember firm's 'potential' amid possible Liontrust buyout
On the second point, the group said Liontrust had been granted "various exemptions" which allowed it "to disregard traded out by one of its fund management subsidiaries prior to the offer announcement when establishing the minimum price of the offer and considering the need to propose a cash alternative to the all-share offer".
According to the group "the conditions for such an exemption are not met, notably because the TOB does not have the authority to exempt Liontrust from compliance with Swiss takeover rules' minimum price requirement", and it is therefore calling for the Swiss authorities to "remove the condition regarding the sale of the fund management subsidiaries from Liontrust's offer".
This is the latest set of grievances NewGAMe has had with Liontrust's proposed buyout, having challenged the valuation the incoming firm had set for GAM, and criticised the absence of a cash offer.
It has also appealed to the Swiss Takeover Board about its offer being conditional on GAM's successful exit from its fund management services arm, which it said fed into the range of exemptions Liontrust had been granted for the proposal.
On the new issues, the shareholder group said it was calling for the board to remove the condition regarding the sale of the FMS business from Liontrust's offer.
"The group also calls on Liontrust to include trading activity in GAM in its offer documents in order for shareholders to fully assess whether the offer complies with the Swiss minimum price requirement as well as the rules regarding cash alternatives," it added.
Liontrust has been contacted for comment.
