An alternative asset management firm whose investment funds hold minority shares in GMP Capital Inc. says a proposed deal with Richardson Financial Group is based on a flawed valuation and is unlikely to receive shareholder approval.

Anson Funds, a firm with offices in Toronto and Dallas, said it intends to vote against GMP Capital’s deal with Winnipeg-based Richardson Financial Group to buy all shares of Richardson GMP. Anson manages investment funds that collectively hold approximately 8.5% of the minority shares of GMP Capital, a release from Anson Funds said.

Last month GMP Capital revised the terms of its purchase agreement in light of the Covid-19 pandemic, valuing Richardson GMP at $420 million, compared with $500 million under a deal announced in February.

In the release on Thursday, Anson said the transaction appears to value the GMP preferred shares at a 40% premium to their pre-announcement trading price, and that the reference value of GMP common shares should be roughly 20% higher.

Anson said the revised transaction is “highly dilutive” and unfair to minority shareholders, resulting in de facto control of GMP going to the Richardson Family “at significantly less than fair value and without paying a control premium.”

Under the terms announced last month, Richardson Financial Group will have an estimated aggregate ownership position of approximately 40.0% following the deal. Existing GMP Capital shareholders (other than Richardson Financial Group) and Richardson GMP advisors will hold 31.4% and 28.5%, respectively, of GMP common shares.

“Due to the obvious failings in the RGMP transaction, we are confident that minority shareholders will vote against the RGMP transaction and that it will fail to receive the necessary ‘majority of the minority’ shareholder approval,” the release said.

GMP Capital said the deal was unanimously approved by its board, which determined it was in the firm’s best interests.

“[T]he transaction strikes an appropriate balance taking into account the effects of the global pandemic, feedback raised by various stakeholders and retaining the appropriate level of capital to execute our long-term value creation strategy,” the firm said in a statement on Thursday.

GMP Capital will be filing a circular next week “outlining the many reasons shareholders should support the transaction,” it said.