(Bloomberg) -- A group of investors in GAM Holding AG said it’s considering rejecting the takeover offer from Liontrust Asset Management because it undervalues the Swiss asset manager and doesn’t include a cash component.

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The shareholder group, which includes a holding for French telecom billionaire Xavier Niel and is led by hedge fund veteran Albert Saporta, said the offer doesn’t reflect the “significant upside” that a turnaround of GAM could generate.

“In addition, the fact that Liontrust only offers its own shares, and is not making any cash offer, implies that GAM shareholders will be subject to the volatility of Liontrust shares without any firm price for a business that has significant intrinsic value,” the group said in a statement Friday.

GAM on Thursday announced that it had agreed to sell itself to Liontrust for 107 million Swiss francs ($121 million), a 16% discount to the closing price a day earlier. A deal would create a £53 billion ($67 billion) global asset manager and draw a line under a tumultuous period for GAM that began five years ago and involved the shuttering of nine funds and the dismissal of star bond trader Tim Haywood.

Read more: Swiss Manager GAM Agrees to Liontrust Sale After Years of Losses

Liontrust gained 3.4% as of 11:26 a.m. in London, while GAM rose 0.7% in Zurich.

Liontrust, which has £31.4 billion of assets, has grown steadily since Chief Executive Officer John Ions took over in 2010, mainly via acquisitions of smaller rivals. In the year through March, clients have yanked £4.8 billion from its funds, however, and its shares are down about 27% in the past 12 months.



NewGAMe SA, a company controlled by a unit of Niel’s personal holding company, and Bruellan, an independent provider of global wealth management solutions, last month formed the shareholder group to act in concert. The group said it holds about 8.3% of GAM’s shares.

GAM has recommended shareholders accept the offer.

(Adds share reaction. A previous version of this story corrected the spelling of Niel in the headline.)

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