An activist investor group has offered a premium of nearly 30 percent for 28 million GAM shares. The Group is against the offer made by Liontrust.
The next gambit has been made in the chess match between an investor group made up of Newgame and Bruellan against Liontrust, which is seeking to take over the troubled Swiss asset manager.
The Group controlling 9.6 percent of GAM's share capital is floating a partial cash offer for 28 million shares of GAM at 55 centimes per share, which is a 29.1 percent premium to the offer made by Liontrust, according to an emailed statement from Newgame Tuesday.
Cash versus Shares
When taking into account the closing price of GAM shares on July 17, the offer price is a premium of 31.9 percent, the same day, Liontrust shares closed at 6.43 pounds. Taking into account the day's exchange rate, the offer price amounts to a 29.1 percent premium.
Newgame's offer is being made in cash, while Liontrust is offering 0.0589 of its shares for one of GAM until July 25.
Grossly Undervalued
The Group says the offer by Liontrust «grossly undervalues» GAM and is also subject to execution contingencies, and believes the firm can be restructured and made profitable again. It is asking shareholders not to tender their shares for the Liontrust offer, and instead support revamping the company.
«The announced offer gives a partial exit to shareholders who are concerned by the absence of an alternative to Liontrust's inadequate offer. As GAM’s second-largest shareholder, we are convinced there is a significant upside associated with the successful restructuring of the company and are confident that GAM shareholders are better off remaining invested in the company,» says Newgam director Albert Saporta.
The offer is subject to regulatory approvals in relevant jurisdictions.
