Liontrust shares surge as dramatic GAM takeover pursuit fails
Shares in Liontrust have rocketed today after the London money manager’s lengthy and dramatic pursuit of ailing Swiss fund manager GAM collapsed .
The firm confirmed to markets this morning that it expected to declare its bid unsuccessful due to a lack of support from GAM shareholders.
Investors seemed to have cheered the move however with shares surging over 11 per cent in morning trading in London.
Analysts at Peel Hunt said the collapse of the deal “de-risks” the proposition of Liontrust with shares set to rally as a result.
“In our view GAM would have brought significant execution risks but uncertain financial benefits given continuing falls in its AUM,” Peel Hunt said.
Further M&A could be on the table with Liontrust either the “predator or the target”, they added.
GAM will now start talks with an activist group, NewGAMe, which has served as a punchy rival to Liontrust throughout its pursuit of the Swiss firm.
The embattled manager will require short-term lending in the near future to survive.
John Ions, Chief Executive of Liontrust, said this morning: “Liontrust made a full and fair offer for GAM, which reflected the financial reality of the business and would have provided a certain and sustainable solution.
“Throughout this process, Liontrust has sought to create corporate and financial stability for GAM and do what is in the best interests of its shareholders, clients and employees. We have always believed that Liontrust’s offer and strategy for ensuring the growth of the combined group is the best way to achieve this.”
Liontrust confirmed to markets it would still pursue its planned dividend of at least 72p a share.
The failed takeover will cost the firm around £11m.
Should NewGAMe come to GAM’s rescue, it would add salt to the wound for Ions.
He has been locked in a war of words with the rival activists, which blew up into an almighty spat earlier this week when one individual linked to NewGAMe accused Ions of misrepresenting his views.