A group of shareholders, unhappy about the proposed takeover of GAM by Liontrust, have called for an extraordinary general meeting, with calls to replace the current GAM board, and make other changes.

A group of investors in Zurich-listed GAM Holding has asked it to consider firing its board and make other changes ahead of its proposed takeover by London-listed asset manager Liontrust. 

GAM said Rock Investment SAS (part of the investor group comprising Newgame SA and Bruellan SA) which holds 5.11 per cent of GAM shares, has asked it to hold an extraordinary general meeting of shareholders on or about 16 August. 

“This [EGM] would be subsequent to the results of the Liontrust tender offer being known, based on the current timeline,” GAM said in a statement yesterday. “The proposed EGM would contemplate the replacement of the existing board as well as a significant change in the capital structure of the firm to allow additional issuance of capital and the suspension of current shareholder participation rights.”

GAM said it expects that Liontrust will issue the offer prospectus today (9 June), setting out their tender offer as announced on 4 May 2023. 

On 4 May, Liontrust said it would pay for the deal by issuing 9.4 million new ordinary shares. It expects GAM shareholders to own about 12.6 per cent of the enlarged firm once the deal is wrapped up. 

GAM has been battling to recover its fortunes since Tim Haywood, who managed the ARBF business, was suspended in 2018 amid claims of misconduct (he was subsequently dismissed). Clients pulled money out of the firm. GAM has also seen its fortunes hit by the selloff in global markets during 2022. In January 2023, GAM said it expected to report an underlying pre-tax loss of about SFr42.8 million ($46.5 million) in 2022, widening from a loss of SFr9.6 million a year earlier. 

The takeover proposal comes at a time when the asset management sector, pressured by continued compliance costs, volatile markets and changing investment models, is looking at ways of building economies of scale and shedding costs.

The request from Rock Investment SAS does not constitute a competing offer to the Liontrust tender offer. These proposals include recommending changes to the articles of the firm, which would allow for the dilution of current shareholders, the GAM statement said. 

“The GAM Board continues to strongly recommend that shareholders accept the Liontrust proposal,” it said.