Rebel GAM shareholders cough up £18m and push through boardroom clearout after Liontrust deal implodes
The rebel investor group that disrupted Liontrust’s takeover of GAM has agreed to cough up CHF 20m (£17.9m) and push through a total boardroom shake-up today – as it scrambles to keep the beleaguered money manager afloat.
NewGAMe and Bruellan, which control nearly 10 per cent of GAM and have the backing of French tycoon Xavier Niel, launched a campaign against Liontrust’s takeover after the London-listed firm revealed a £96m swoop in May. The deal fell apart last week.
In a statement today, NewGAMe and Bruellan said they had now struck a short-term financing deal with GAM and would work “to secure sufficient financial resources to fund GAM’s operations as a going concern.”
“As a result of our productive discussions with GAM’s board and management over the past few days, we have a clear path forward,” said Antoine Spillmann, CEO and Partner at Bruellan.
“We have agreed to provide immediate funding of CHF 20 million and committed to secure additional financial resources to fund GAM’s operations.”
The CHF 20m package will be paid back by the proceeds of a CHF 25m convertible bond set to be issued by GAM in late September depending on a vote by shareholders at a meeting on 27th September. Bondholders will be able to convert their bonds into equity at a later date.
While GAM’s leadership remains in place after the failed takeover, bosses are also set to tell shareholders to vote through a major shake-up at the meeting in late September, with NewGAMe’s preferred candidates expected to replace the incumbent team.
The financing may hint at a way out for beleaguered GAM which is still reeling from a Greensill-linked scandal in 2018. Assets under management have cratered by more than half in the last five years to just CHF68bn at the end of June, while its share price has plunged nearly 95 per cent during that period. The scandal led to GAM being slapped with a £9.1m fine in 2022.
GAM had lobbied shareholders to back Liontrust’s takeover and two weeks ago rebuffed a similar CHF 25m financing offer from NewGAMe, saying it needs to “accept the realities” of its financing position and would need more CHF 100m to stay operational.
An agreement to the deal today therefore marks a sharp about turn for GAM.The fresh package came as Liontrust announced it would request repayment of an £8.9m loan it offered to GAM while the two were locked in takeover talks.