The Gam board has agreed to step down following the failed takeover of the company by Liontrust.
In an announcement this morning (August 29), the current board agreed to stand down at an extraordinary general meeting next month once new directors are elected.
Gam has also set up short-term financing with investor group NewGame and Rock Investment SAS of CHF20mn (£17.9mn) to cover Gam’s liquidity needs.
Rock is a French-incorporated entity that is owned by NJJ Holding, who own 9.6 per cent of Gam, and is run by French telecoms billionaire Xavier Niel. It is part of the NewGame group of investors consisting of NewGame SA and Bruellan SA.
The group had previously lobbied to block the Liontrust deal before launching their own partial cash counter offer in July.
Gam faces large losses, posting a loss before tax of £21mn for the first six months of 2023, and it expects to need a capital injection of around £90mn.
The company has also seen its assets under management fall to £61bn at the end of June compared to £75bn the year previously and £89bn at the end of 2022.
According to the group, the short-term financing will remain until it is replaced by the proceeds of a convertible bond to be issued by Gam in an amount of about CHF25mn.
David Jacob, Gam's chairman, said: “I am pleased that we have successfully concluded our discussions with NewGame and entered into financing arrangements.
“This provides a clear path forward for Gam and stability for our clients, employees and all other shareholders. I would like to thank clients, employees and shareholders for their patience during the process of securing a strategic outcome for Gam.”
Last week (August 24), Liontrust’s £96mn bid to buy Gam failed, leading the way for the Swiss company to start discussions with the rebel investor group which lobbied against the deal.
Liontrust revealed 33.5 per cent of Gam shareholders voted for its proposed deal meaning the company was unable to win the support of the majority.
Liontrust chief executive John Ions said: “We are disappointed we did not win the support of the majority of Gam’s shareholders and are grateful to those Gam and Liontrust shareholders who did back our offer. We also thank everyone at Gam for working so hard to make our offer succeed.
“We hope that Gam is able to achieve a positive outcome for the business.”
As part of its bid to take over the company, Liontrust had made financing available to Gam in the form of an £8.9mn loan.
Liontrust has the right to demand immediate repayment from Friday, September 29 - the date falling 30 days after today's announcement.
amy.austin@ft.com
