Receive free GAM Holding AG updates
We’ll send you a myFT Daily Digest email rounding up the latest GAM Holding AG news every morning.
The board of struggling Swiss asset manager Gam plans to step down after the failure of a takeover offer by UK rival Liontrust, leaving the company in the hands of the activist investors who disrupted the deal.
In a statement on Tuesday, the Swiss group said the activist group would propose new directors for election to the board at an extraordinary general meeting in September. All of Gam’s board would step down providing the new directors secured election, it added.
In addition Gam had organised short-term financing to replace a £17.8mn loan previously provided by Liontrust, the company said.
The future of Gam is now in the hands of the activists, which include Rock Investment and wealth manager Bruellan, who own 9.6 per cent of the company and are headed by French telecoms billionaire Xavier Niel. The group led by Niel had previously criticised Liontrust’s offer, saying it undervalued Gam and did not recognise the value a turnaround could generate for shareholders.
Gam, in turn, had previously criticised the activist group’s offer of short-term bridge financing, saying it would be “insufficient” to maintain Gam as a going concern. Part of the group, Rock Investment, will provide a loan of SFr20mn ($23mn) to replace funding provided by Liontrust, which has said it will request repayment in 30 days. If approved by shareholders at the upcoming EGM, this financing will be replaced by the proceeds of a SFr25mn convertible bond issued by Gam.
Gam’s share price has collapsed by 95 per cent in the past five years after it was fined by regulators and lost one of its star fund managers over its involvement in the Greensill scandal.
Antoine Spillmann, chief executive of Bruellan, said the activist group had committed to secure additional financial resources to fund Gam’s operations. “Today is a pivotal step in the turnaround and enhancement of one of the industry’s iconic asset management firms,” he said. “We are excited by the opportunities that lie ahead.”
David Jacob, Gam’s chair, said he was pleased Gam had successfully concluded its discussions with the activist group and entered into financing arrangements. Jacob is among those intending to resign.
“This provides a clear path forward for Gam and stability for our clients, employees and all other shareholders,” Jacob said.