GAMZ trade ideas
GAMZ ShortGAM Holding AG announced that they will report Q3, 2023 results on Oct 19, 2023
Return vs Industry: GAM underperformed the Swiss Capital Markets industry which returned -13.5% over the past year.
Return vs Market: GAM underperformed the Swiss Market which returned 0.9% over the past year.
Liontrust Asset Management PLC (LSE:LIO) agreed to acquire GAM Holding AG (SWX:GAM) for approximately CHF110 million.
The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model.
Stable Share Price: GAM is more volatile than 90% of Swiss stocks over the past 3 months, typically moving +/- 14% a week.
Volatility Over Time: GAM's weekly volatility (14%) has been stable over the past year, but is still higher than 75% of Swiss stocks.
(Source simplyallstreet)
Liontrust Asset Management PLC (LSE:LIO) agreed to acquire GAM Holding AG (SWX:GAM) for approximately CHF110 million on May 4, 2023. The Consideration will be satisfied by the issue of 9.4 million new ordinary shares in Liontrust. Liontrust Asset Management has agreed to acquire GAM for consideration, valuing each GAM Share at CHF 0.6723.
It is expected that Liontrust will offer 0.0589 Liontrust Shares for one (1) GAM Share (the "Exchange Ratio"). It is expected that GAM shareholders will own approximately 12.6 percent. of the combined group on the completion of the deal. The transaction is subject to minimum tender and approval by acquirer shareholders.
The transaction has been approved by the Swiss Takeover Board (TOB). The Proposed Acquisition is expected to complete in the 4th quarter of 2023. As of May 10, 2023, NewGAMe SA and Bruellan, which controls approximately 8.4% of the issued share capital of GAM Holding AG, has formally challenged the decision of the Swiss Takeover Board regarding Liontrust Asset Management PLC's announced exchange offer for GAM. As of June 9, 2023, Liontrust Asset Management PLc expects to publish both the Circular and Offer Prospectus on or around June 13, 2023
Alantra Corporate Finance LLP is acting as Lead Financial Adviser to the GAM Holding AG in connection with the Proposed Acquisition. Singer Capital MarketsAdvisory LLP is acting as Sole Sponsor, Financial Adviser and Sole Broker to the GAM Holding AG in connection with the Proposed Acquisition. Deloitte LLP is acting as Reporting Accountant and Dentons UK and Middle East LLP as Legal Adviser to the GAM Holding AG in connection with the Proposed Acquisition. JPMorgan Chase & Co. acted as financial advisor for GAM Holding AG.
Claude Lambert, Lorenzo Togni, Stefan Kramer, Richard Stäuber and Micha Fankhauser of Homburger AG acted as legal advisor to GAM Holding AG.
Troubled Gam may be acquired by a larger groupGAM Holding AG is a Swiss Investment Manager firm which runs a number of Investment funds.
Just over a year ago GAM Holding AG suspended a manager for not following internal procedures. The repercussions on GAM were enormous. One of their funds, "ARBF", had to be suspended. Most investment advisors removed all GAM funds from their recommended list and GAM suffered huge outflows of funds.
GAMs share price collapsed from over CHF 16 to around CHF 4.00 - a fall of 75%
GAM now seems to have stemmed the outflow of funds. AUM rose quarter on quarter to March 2019. GAM says its priority is to restore confidence and move on from the past incident. The winding up of the ARBF is expected to be completed in mid July 2019.
GAM is exploring all options to maximise value for shareholders. According to some press reports, that includes seeking a merger partner, but does not exclude going it alone.
As a provider of investment funds, GAM is a pretty small player. A larger fund manager could easily absorb GAM, its funds and clients without taking on too much extra resources. Following the collapse in the share price, GAM is trading at a level well below what would be expected based on assets under management alone. Look at the table below.
Recently, three fund managers have taken 3% stakes in GAM. Shroders, Blackrock and Soros. George Soros and his activist funds are opportunists who may be instrumental in engineering a merger.
Have a look at the table below. Notice how GAM's Market capitalisation relative to its assets under management is much lower than the other firms.
Name of Company GAM Holding AG
Currency CHF
AUM (billions) 139
Revenues 2020e (millions) 338
Market Capitalisation (millions) 710
Name of Company Schroders plc
Currency GBP
AUM (billions) 421
Revenues 2020e (millions) 2'071
Market Capitalisation (millions) 6'820
Name of Company Blackrock Inc
Currency USD
AUM (billions) 6'520
Revenues 2020e (millions) 16'900
Market Capitalisation (millions) 70'811
As for GAM's share price, the low point seems to be well behind us. It took quite a leap on the announcement of the Soros stake in May 2019, and has maintained the higher levels since then. It may be a long road to recover, but the kicker could be a bid.
