October 10, 2018 / 11:19 AM / a month ago

GAM shares surge following report of takeover talks

ZURICH (Reuters) - GAM Holding (GAMH.S) shares surged more than 16 percent on Wednesday following a media report that the Swiss fund manager was in informal talks with potential buyers.

The company’s stock reached a high of 8.20 Swiss francs after opening at 7.035 francs. At 1050 GMT, the stock was trading 11 percent higher at 7.80 francs.

A spokesman for GAM declined to comment.

The company has been shaken by a decision to suspend a director in charge of absolute return bond funds in July, which triggered an investor exodus and a sharp fall in the company’s shares.

Bloomberg reported that informal talks were under way with potential buyers for the entire GAM business or a portion of it, to look at ways of stabilising the company whose share price has halved in the past 12 months.

Talks were in early stages and may not lead to a deal at all, Bloomberg said, citing people familiar with the matter. A potential sale could attract interest from Italian or French asset management companies as well as the wealth management business of banks, it added.

GAM overhauled its management team last month in the wake of the affair, which was prompted by a tip from an internal whistleblower.

GAM has said it suspended Tim Haywood after questions arose about whether he failed to conduct sufficient due diligence and make accessible some internal records.

Haywood may have breached the company’s signatory policy, may have used his personal email for work purposes, and breached the company’s gifts and entertainment policy, the company said.

GAM Chairman Hugh Scott-Barrett in August said the board would look at “all avenues to optimise shareholder value”, although he did not specify what these could include.

Reporting by John Revill and Oliver Hirt; Editing by Michael Shields

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