The immediate focus for the business is set to be investing in client service and portfolio management, specifically hiring in senior sales and distribution team members focused on Europe and the UK, as well as investment managers for both the luxury brands and credit opportunities strategies.

GAM has already made several new appointments in recent weeks in a bid to grow the business and increase profits, including changes to the group management board. 

Speaking to the recent work, Elmar Zumbuehl, chief executive of GAM, said: “I am delighted to have been able to strengthen the Group Management Board with these appointments and together we will lead the turnaround of GAM […] The continuing strong investment performance and the support from our anchor shareholder Rock means that we can move forward with confidence and with a focus on growth and returning GAM to profitability.”

UK asset manager Liontrust conditionally agreed to acquire its Swiss competitor GAM Holding for £96 million back in May, following murmurs of the deal in April, however the board of GAM Holding subsequently declared Liontrust Asset Management’s offer for the business unsuccessful in August, and an agreement was instead made with Rock Investment SAS and Newgame to finance the business’ liquidity needs. 

Read more – GAM acquisition saga continues as Rock Investments proposes new alternative to Liontrust deal

GAM has confirmed that the financing agreement with Rock which provides CHF 100 million in funding has been completed. The loan term will run until June 2025, with an option to extend by another year.

Rock, in conjunction with the other Newgame investors, will control around 30% of GAM shares once their tender offer has completed, the businesses confirmed.

Anthony Maarek, managing director of NJJ Holding – of which Rock is a subsidiary, said: “GAM is an important long-term strategic investment for NJJ, and we are committed with management to restoring the company to a best-in-class global asset management firm. We view it as the first step in developing an investment pillar in financial services as part of NJJ’s long term strategy.”

The post GAM shares turnaround plan to return to profitability appeared first on The TRADE.

NJJ Holding-owned Rock is part of an investor group, also consisting of companies Newgame and Bruellan, which controls 9.6% of GAM Holding.

The agreement specifically relates to an extension of the previously proposed immediate short-term financing of CHF 20 million in order to cover GAM, which would remain until replaced by the CHF 25 million convertible bond proposed by Rock Investments last week.

Initially, the financing option was declared lacking by GAM in a statement made on Monday 21 August, which claimed the amount represented around a quarter of the necessary input.

However, the business will now move to finalise the proposed financing with GAM shareholders at an extraordinary general meeting held on or around 27 September.

The outcome follows significant back and forth around the Liontrust and GAM deal over the last three months – which saw significant mudslinging between the Newgame group and GAM.

UK asset manager Liontrust conditionally agreed to acquire its Swiss competitor GAM Holding for £96 million back in May, following murmurs of the deal in April.

Speaking at the time the offer was announced, John Ions, chief executive of Liontrust, said: “We have made a good and fair offer for GAM and believe it is in the best interests of the shareholders of both companies, as well as clients and employees, by providing a great platform for growth along with corporate and financial stability for GAM.”

Supporting this, David Jacob, chair of GAM, at the time expressed the board’s recommendation that it be accepted by all shareholders. However, there was immediate backlash from some stakeholders.

Following the announcement of the proposed takeover in May, the Newgame and Bruellan investor group stated that it was considering rejecting the offer and believed there were better options which could turn the business around. 

At the time, the investor group stated that it believed the offer undervalued the GAM business, highlighting the fact that it was not a cash offer as a key drawback: “The fact that Liontrust only offers its own shares […] implies that GAM shareholders will be subject to the volatility of Liontrust shares without any firm price for a business that has significant intrinsic value.”

In addition, the group expressed concern related to the execution contingencies of the proposed deal – “the risk of an unsuccessful exit of GAM’s fund management services business in Luxembourg and Switzerland (on which almost no information is being provided) is being shifted to GAM shareholders,” said the investor group.

In recent months, the group has made various statements aimed at preventing the Liontrust takeover and has previously filed two official objections to the Swiss Takeover Board (TOB) concerning the Liontrust offer in the last two months.

In addition, the group also considered a partial public offer to purchase “up to” 28 million GAM shares – equating to around 17.5% of the issued share capital of GAM for CHF0.55 per share in a bid to halt the offer.

This latest development following the rejection of the Liontrust offer, will also see the current GAM board stand down at the upcoming EGM, with new directors proposed by Rock.

The investor group has confirmed to the current board “their intention to secure sufficient financial resources to fund GAM’s operations as a going concern”. In response to this, the board has stated a recommendation to shareholders to approve the proposed candidates.

Speaking to this latest development, Jacob, said: “I am pleased that we have successfully concluded our discussions with NewGAMe and entered into financing arrangements. This provides a clear path forward for GAM and stability for our clients, employees and all other shareholders. I would like to thank clients, employees and shareholders for their patience during the process of securing a strategic outcome for GAM.”

The post Liontrust offer for GAM declared ‘unsuccessful’ as asset manager extends immediate short-term financing appeared first on The TRADE.

Rock Investments has proposed a short-term bridge financing in the form of a CHF25 million convertible bond, to be used in the event that Liontrust’s offer for GAM Holding is not accepted.
 
The short-term bridge financing from Rock is planned to be presented at a future EGM and would reportedly replace their previously proposed bridge financing.

However, the financing option has been declared lacking by GAM in a statement made on Monday 21 August, which made clear that this amount represents around a quarter of the necessary input.

In response to the communication sent by Rock to the GAM board on 17 August, GAM has stated that “the proposed convertible bond is insufficient to maintain GAM”, explaining that a capital injection for the immediate foreseeable future would need to be in excess of CHF 100 million.

“Against this background, the proposed convertible bond is insufficient to maintain GAM […] in the short term let alone over the next 12 months as required by law and regulators,” said the business.

UK asset manager Liontrust conditionally agreed to acquire its Swiss competitor GAM Holding for £96 million in May, following murmurs of the deal in April.

If the transaction is successful, the new global asset management entity would hold £53 billion in assets under management (AUM) and administration, expanding Liontrust’s product range into fixed income, thematic equities and alternatives, as well as its overall presence across Europe. 

Following announcement of the proposed takeover, an investor group, made up of companies Newgame – controlled by Rock Investment – and Bruellan, which together control 9.6% of GAM Holding, stated that it was contemplating rejecting the offer.

The group has continually expressed that it believes the offer from Liontrust fundamentally undervalues the GAM business. It has previously filed two official objections to the Swiss Takeover Board (TOB) concerning the Liontrust offer thus far.

The most recent announcement from GAM on Monday reiterates the board’s preference for the Liontrust takeover. 

Speaking to shareholders earlier this month, David Jacob, chair of GAM, said: “I acknowledge that this has been a challenging journey for shareholders. However, at this critical point, I urge you to tender your shares into the Liontrust Offer. By doing this, you protect your investment and have the opportunity to participate in the future value creation from the enlarged firm.”

In a statement this week, GAM once again asserted that the Liontrust offer is the only viable option and in the interests of all stakeholders.

“Liontrust have done extensive due diligence and the enlarged business will have a strong balance sheet, a broader array of excellent investment products, a global distribution footprint and the capability to deliver synergies and growth.”

The newest deadline for shareholders to tender their shares into the Liontrust offer is 23 August 2023.

In the same communication, GAM also addressed Rock directly, urging the business to accept the realities of GAM’s financial position: “If the Liontrust offer is declared unsuccessful it is essential that Rock acknowledge and accept publicly that the level of funding needed to stabilise GAM is significantly higher than the net proceeds of the Rock proposed convertible bond.

“[…] failing to do so is not reflective of GAM’s actual financial position and business performance and is misleading to GAM and its shareholders.”

The Newgame and Bruellan investor group and Liontrust Asset Managament both declined to comment when approached by The TRADE.

GAM Holdings did not immediately respond to a request for comment.

The post GAM acquisition saga continues as Rock Investments proposes new alternative to Liontrust deal appeared first on The TRADE.