GAM labels NewGAMe's proposal withdrawal 'vexatious' and a disruption strategy

GAM's board has told investors that NewGAMe's proposal withdrawal and EGM cancellation are an attempt to "disrupt" the Liontrust offer so that NewGAMe can "seek to take control" if it is not successful.

The letter to shareholders sent out today (17 August) comes after months of back and forth between the asset manager's board and the investor group and a week after the latter formally asked to cancel the EGM that was due to take place tomorrow (18 August).

The EGM had first been called by shareholder Rock Investment, which is a part of NewGAMe, in early June. This would have allowed shareholders to vote on the conditions of NewGAMe's partial offer.

However, on 9 August, NewGAMe withdrew all of their proposals, an action which GAM said was only performed to disrupt the Liontrust offer so that the group could seek to take control of GAM if the Liontrust offer is not declared successful.

GAM shareholders withdraw proposals for EGM

In the letter, GAM insisted that NewGAMe was not a credible alternative path for the firm or its shareholders and while there are many reasons for this lack of credibility, the most important is that the group has "not committed the financial support required to maintain GAM as a going concern".

It also called NewGAMe's decision to withdraw its proposals a "vexatious use of shareholder rights" while reasserting three points as to why they were not, and still are not, a viable option, as follows:

1)    It is highly uncertain that another EGM could be convened in time to address GAM's financial position.

2)    NewGAMe has not carried out detailed due diligence and we do not believe that their financial assumptions are founded on a viable factual basis. 

3)    NewGAMe recently published a ‘100-day plan' which we believe is unrealistic, insufficiently funded and presents a significant risk to GAM's going concern.

Liontrust extends GAM offer deadline as John Ions responds to shareholder group

Meanwhile, GAM highlighted the independent experts and third-party stakeholders that have so far demonstrated strong support for the Liontrust offer, including corporate finance advisor IFBC AG, regulators in the UK, Switzerland and Ireland, and Silchester International Investors, its largest shareholder.

The firm also reminded shareholders that its own portfolio managers had more than once written to the board expressing their support for the offer.

As it has done since the start of the saga, GAM urged shareholders again to tender their shares into the Liontrust offer.

It said the benefits would include the creation of a stable business with the right support to ensure GAM remains a going concern, and a path to benefit from the combined firm's future value creation with a wider product range and global distribution capability.

The board added: "Liontrust is ready to go, with a proper strategy and business plan, founded on deep knowledge of GAM through their extensive open book due diligence and with finances in place."