GAM is again at the center of deal talk, but getting a buyer to nibble at the battered Swiss asset manager is another story altogether.
The Zurich-based asset manager was quick to bat down market chatter reported by «Bloomberg» on Tuesday that GAM is talking to Italian insurance giant Generali. «GAM can confirm that there are no discussions with the aforementioned company, or any other company, concerning mergers-and-acquisitions activity,» it said in a statement.
The denial raised eyebrows in the asset management industry, where it is an open secret that GAM hired Citigroup last year as its M&A advisor. Since then, Britain's Schroders, Swiss bank UBS, and American fund house Columbia Threadneedle have surfaced as potential suitors sniffing around GAM.
Generali's Interest
And now Generali: a person familiar with the matter told finews.com that the Italian insurance giant is, in fact, interested in GAM – and in its distribution network in Italy in particular. GAM's denial reflects a different reality altogether, this person said: «The company hasn't been sellable for a year now – probably for good reason.»
A spokesman for GAM didn't comment beyond reiterating that the company «will always assess options to maximize value for shareholders and other stakeholders.» The fund boutique has seen more than two-thirds of its market capitalization dissipate in the wake of a major scandal. While the price might perk up interest among potential buyers, GAM is still in the midst of recovering from the blow-up.
«Pick and Mix» Company
Suitors are mindful of potential risks yet to surface, as investigations by the U.K. financial overseer are ongoing. Add to this that most asset managers are suffering a feeble share price, meaning their own stock as acquisition currency doesn't go far.
GAM's offering also remains a bit «pick and mix», the person said: the company derives the bulk of its revenue from private labeling funds for third-parties. But until now, suitors have mainly homed in on the investment management piece on its own – or even parts of it.
Given GAM's reluctance to divvy itself up, buyers aren't biting. For now, the company is «focused on simplifying the business and improving profitability» under new Chief Executive Peter Sanderson.
