Liontrust bid fails as GAM enters discussions with shareholder group NewGAMe

Liontrust has failed in its takeover bid for GAM, achieving just 33.45% of total shares tendered, well short of the 66.6% minimum acceptance level.

As a result, Liontrust expects to formally declare the offer unsuccessful on 29 August.

The failure comes at the end of a protracted offer process, which was twice extended and has seen Liontrust and GAM, the board of which backed the takeover offer, in heated competition with shareholder group NewGAMe.

NewGAMe accuses Liontrust CEO of 'bordering illegality' with 'misleading' communications

Yesterday (23 August), Liontrust CEO John Ions was accused by NewGAMe of lying to investors about the views of a major shareholder.

Following the failure of the bid, GAM has entered into "constructive and productive discussions" with NewGAMe, focused on short term bridge financing, which was first offered by Rock Investment SAS, a member of the shareholder group, on 18 August.

In addition, NewGAMe has "recognised the need to ensure that GAM has appropriate and adequate financing to continue", according to GAM.

An update will be provided "as soon as such discussions have progressed further", with an EGM to follow.

Chair of GAM David Jacob said: "The GAM Board acknowledges that the majority of our shareholders have not found the Liontrust offer compelling. I am pleased that we have entered constructive and productive discussions with NewGAMe and that these discussions continue at speed."

Despite the failure, Liontrust is set to pay up to £11m in costs related to the offer, of which £2m was incurred in the financial year ending 31 March 2023, primarily related to corporate finance, extended legal expenses, accountancy services and third-party due diligence.

GAM cancels EGM and reasserts recommendation of Liontrust offer

Liontrust CEO Ions said the firm sought to create "corporate and financial stability for GAM" and was "impressed by the quality, dedication and professionalism of everyone we met at GAM".

"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," he said.

"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.

"We hope that GAM is able to achieve a positive outcome for the business."