GAM’s end game still has a way to go

Gam Holding AG

24/08/2023 11:08

(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
       MILAN, Aug 24 (Reuters Breakingviews) - GAM’s  GAMH.S 
long-running takeover saga has entered a critical phase. Rebel
NewGAMe investors, backed by French billionaire Xavier Niel,
appear to have successfully frustrated a takeover offer by
Britain’s Liontrust Asset Management  LIO.L  for its troubled
rival. NewGAMe’s offer of 55 cents a share for 17.5% of GAM last
month stifled Liontrust’s lower-valued bid in shares. The UK
money manager has secured only a third of total GAM shares, a
far cry from the two-thirds it needed.  
    The ball is now with the opposing shareholders, which
control nearly 10% of the asset manager. GAM, which has been hit
by the Greensill scandal as well as the pandemic and the Ukraine
conflict, needs money to get its business on a firmer footing.
Even though 90% of its funds have outperformed their benchmarks
in the year to June, GAM’s assets have more than halved to 68
billion Swiss francs since 2018.  The NewGAMe crowd has proposed
issuing a 25 million Swiss franc convertible bond to give GAM
some breathing space. But this won’t cover expected losses,
restructuring charges and pension costs amounting to at
least 100 million Swiss francs, GAM has calculated. As things
stand, to win the game of rescuing this embattled asset manager,
investors will have to dig deep. (By Lisa Jucca)  
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 (Editing by Aimee Donnellan and Streisand Neto)
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