A former president and CEO of GMP Capital Inc. who also served as chairman of the board of directors of Richardson GMP, has notified the company that he is opposed to a recent agreement between the two firms and will be proposing new directors for election at the upcoming meeting of GMP's shareholders in October.
Kevin Sullivan said he advised the chairman of the board of GMP that he believes the latest terms agreed to unduly favour Richardson at the expense of GMP's other shareholders, and will not be approved by GMP's shareholders.
GMP intends to consolidate ownership of Richardson
GMP Capital Inc. announced last month that it had entered into a definitive purchase agreement with Richardson Financial Group Limited to consolidate 100 per cent ownership of Richardson GMP.
Sullivan said GMP's consolidation of the ownership of Richardson GMP would be in the best interests of GMP, provided that the transaction is undertaken on terms that are fair to all GMP shareholders.
Sullivan is also concerned that GMP's existing board has now tried twice to gain support for terms that unduly favour the interests of RFGL over GMP's other shareholders.
Sullivan has advised GMP board of terms he would support
“In an effort to achieve a fair and executable transaction, Mr. Sullivan advised GMP's chairman of the terms that Mr. Sullivan would support and that he believes would also be supported by GMP's non-RFGL shareholders generally. Mr. Sullivan believes that these terms would also be more favourable to the Richardson GMP investment advisor shareholders, who are essential to the future success of the business,” he said in a news release.
GMP believes the transaction, which has been approved by its board of directors and was recommended by a special committee of independent directors, is in the best interests of the company and all shareholders. RBC Capital Markets has also provided an opinion to GMP's board that the transaction is fair, from a financial point of view, to the company.
