Investor group opposing Liontrust’s purchase of GAM alleges asset manager spread “false rumors and information”
- Liontrust’s proposed takeover of GAM would create a company with £53bn of assets under management
- NewGAMe and Bruellan say the offer “significantly undervalues” the business
- Albert Saporta, CEO of NewGAMe, accused Liontrust of trying to scare off investors
A war of words has erupted over the possible takeover of GAM, after a rogue investment group accused Liontrust of spreading “rumours and false information” to try to thwart its rival bid.
It comes just one day before the deadline for shareholders of the Swiss fund manager to accept Liontrust Asset Management’s proposed acquisition of GAM.
The £96 million deal would create a business with £53 billion in assets under management and a further enhanced range of funds and asset class offerings.
Allegations: NewGAMe has accused Liontrust Asset Management of spreading “rumors and false information” to try to thwart its proposed partial cash offer for GAM.
But NewGAMe and Bruellan, who own an estimated 10 percent stake in GAM, have said the offer is unbalanced, “significantly undervalues” the company and contains unattractive performance contingencies.
They have proposed a partial counterproposal that includes issuing a 25m Swiss franc (£22.3m) loan, electing a new board of directors and increasing the proportion of high value-added investment products.
An email sent by Liontrust’s director of corporate development, David Boyle, on behalf of company CEO John Ions, to some GAM investors said that John Seo, managing director of Fermat Capital, a third-party manager of GAM, had ‘questioned the integrity of NewGAMe.’
He added that the Fermat co-founder “had no intention of jumping straight into relationships with people he doesn’t trust.”
As a result, Seo was “seriously thinking” of ending Fermat’s relationship with GAM if NewGAMe’s bid was successful.
But Albert Saporta, CEO of NewGAMe, has published a conversation between himself and Seo in which the latter described being “shocked and appalled” by the email.
Seo also claimed that he “never wrote those words and… would never approve of them” and had contacted Ions, who promised to “retire” from the email.
Saporta commented: ‘With these emails, Liontrust is now spreading rumors and false information to scare shareholders into bidding at the last minute.
“As tomorrow we should come to the end of this ordeal with Liontrust’s bidding deadline, we thank the shareholders who have expressed their support for our turnaround plan by seeing the misleading statements by GAM and Liontrust and not bidding for this deal. “.
A NewGAMe spokesperson confirmed the email exchange between Seo and Saporta to This is Money.
Liontrust acknowledged the email sent by Boyle, but declined to comment on whether Ions had overruled it.
Anthony Maarek, CEO of NJJ Holding, which oversees NewGAMe, told Liontrust Chairman Alastair Barbour in a letter that the The Swiss procurement board has been contacted regarding emails.
Maarek accused Liontrust of exceeding the “limits of what can be decently and legally undertaken” to persuade investors to accept a takeover offer.
Liontrust Asset Management Shares they rose 1.2 percent, or 7 pence, to 605 pence on Wednesday afternoon, though they have plunged about 70 percent in the past two years.
The company’s operating profit fell by more than a third to £49.3m for the 12 months to March after its UK retail funds and managed portfolio service saw investors withdraw more funds from classes. of riskier assets.
Stock markets have been hit by growing economic uncertainty caused in part by central banks raising interest rates to try to curb inflation.