Gam has pushed back against a rival loan offer from Rock Investments saying that it needs more than CHF100mn (£89.2mn) to continue running.
In an update, published yesterday (August 21), Gam’s board said the level of capital injection required “in the immediate foreseeable future” exceeded CHF100mn.
It comes after last week Rock Investments wrote to the Gam board proposing short-term bridge financing should the Liontrust offer be unsuccessful.
Rock Investments is owned by parent company NJJ Holding SAS, which also oversees NewGam, a rival investor group which controls almost 10 per cent of Gam’s shares and which has made repeated attempts to derail the Liontrust deal.
Rock said it planned to propose, at an extraordinary general meeting, a CHF25mn convertible bond which will replace their proposed bridge financing.
But Gam has said Rock’s proposed convertible bond is “insufficient to maintain Gam as a going concern, in the short term let alone over the next 12 months as required by law and regulators”.
Therefore the Gam board continued to strongly recommend the Liontrust offer to Gam shareholders.
The Gam board stated: “Gam requests that Rock acknowledge and accept the realities relating to Gam’s financial position, if the Liontrust offer is declared unsuccessful.
“It is essential that Rock acknowledge and accept publicly that the level of funding needed to stabilise Gam is significantly higher than the net proceeds of the Rock proposed convertible bond (approximately net CHF15mn) and is likely to be in-excess of CHF100mn.
“Failing to do so is not reflective of Gam’s actual financial position and business performance and is misleading to Gam and its shareholders.”
Last week Gam cancelled its extraordinary general meeting blaming a "vexatious use of shareholder rights".
It came after NewGam withdrew its proposals from the meeting, meaning it would have gone ahead with an empty agenda.
Liontrust's offer period closes on August 23 after the deadline was extended three times.
Gam's largest single shareholder, Silchester International Investors which owns around 17 per cent of the company, announced last month it would support the Liontrust deal.
Liontrust’s £96mn acquisition of Gam was announced in May and will create a wealth manager with £53bn of assets under management - Liontrust's shareholders voted to approve the takeover last month.
amy.austin@ft.com
