A group of former GMP executives has come out against the proposed transaction to acquire the remaining shares of Richardson GMP.
The group includes former GMP Capital CEO Harris Fricker and other former senior managers who together own almost 17% of GMP’s outstanding shares. In a joint statement Monday, the shareholders said they will vote against the transaction and for five new director nominees proposed last week by former GMP executive Kevin Sullivan.
Opposition to GMP’s deal with Richardson Financial Group to buy all shares of Richardson GMP has emerged since revised terms were announced last month.
In a statement, the group of shareholders said Monday that the transaction undervalues GMP and unfairly benefits Richardson Financial Group.
Richardson Financial Group will have an estimated aggregate ownership position of approximately 40% following the deal, up from 24.1%. 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.
In his letter to shareholders last week, Sullivan said a renegotiated deal should return $40 million to GMP’s pre-closing shareholders through a share buyback. This would be in addition to the $0.15 per share special dividend that’s part of the proposed transaction.
He also called for a governance agreement to ensure that Richardson doesn’t use its ownership position “to take actions that are contrary to the interests of GMP’s post-closing minority shareholders.”
Last week, GMP Capital responded by publishing a list of advisors who support the transaction as proposed. The advisors represent 97% of the firm’s assets under administration, the firm said.
If the transaction falls through, shareholders “will face value destruction because Richardson GMP’s investment advisors may react to the ongoing uncertainty by departing for competitors,” GMP board chair Donald Wright said in a statement.
Shareholders vote on the transaction on Oct. 6.