As the deadline approaches for shareholders to back Liontrust’s takeover of Gam, analysts say the experience has been “chastening” for the firm.
Liontrust has made its name through a series of successful takeovers over the past decade.
Under the leadership of John Ions, the firm’s assets under management have grown from £1bn to more than £31bn over the past 13 years.
However, since May the asset manager has faced considerable resistance to its latest acquisition attempt, with rebel Gam shareholders attempting to block the deal and launching their own partial cash counter offer in July.
This has forced Liontrust to extend its shareholder offer deadline three times and waive an exit condition.
Despite this, Liontrust has insisted that its £96mn offer is the right move for Swiss asset manager Gam.
Ben Yearsley from Fairview Investing told FTAdviser: “It feels like a complete mess. It felt like a slightly odd acquisition to start with, it felt like an odd fit.
“Now they are having to extend the deadline so obviously a large number of people are not happy.
“It is a new experience for them and I think they have messed it up. It will be a chastening experience for them.”
Another analyst who spoke to the FTAdviser said there are questions over whether the current management of Liontrust would survive if the Gam deal was unsuccessful.
The analyst, who wanted to remain anonymous, said: “There are some people who would simply see this as deflecting attention from the core business and there are others that would say the problems with the core business show it isn’t built for growth but they need to do this deal to diversify their business.
“There is a sense that Liontrust is doing this because they are running out of rope a bit on its core strategy.”
Liontrust defended the proposals. A spokesperson said: “The proposed acquisition of Gam gives us the opportunity to accelerate Liontrust’s strategic development by expanding the product range, the physical footprint of our distribution and talent across the company.”
Chelsea Financial Services managing director Darius McDermott, described Liontrust’s growth from a medium sized boutique firm as “pretty extraordinary”.
He said: “John Ions came in when the share price was below 50p and almost from scratch he has built a really tidy asset management business.”
The spokesperson for Liontrust said: “Liontrust has created an environment in which fund managers can focus on investment and their distinctive investment processes; in taking this approach, there is cultural alignment between Liontrust and Gam.”
They added that the expanded range of funds will enhance the company’s product range and allow Liontrust to expand its distribution and client range to access and develop nascent markets including the Americas and Asia-Pacific.
tara.o'connor@ft.com
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