The planned transaction to give GMP Capital Inc. full control of Richardson GMP Ltd. is on hold.
Toronto-based GMP announced that, due to current market volatility, a definitive agreement on the terms of a deal that would see GMP take full control of Richardson GMP will not be reached by the initial deadline, and a planned shareholder meeting to approve the deal has been postponed.
The meeting to approve the deal was slated for April 21.
“The parties are continuing to work toward entering into a definitive agreement and remain hopeful that they will do so in the future,” GMP said in a release.
“The company cautions its shareholders and other stakeholders that there is no assurance that any transaction involving Richardson GMP will result from these discussions or on what terms or structure any transaction may occur,” it added.
The firm also said it will not be providing updates on the progress of the discussions, except as required by securities law.
On Feb. 26, the firms announced they entered into a non-binding term sheet, and expected a definitive deal to follow within 15 business days.
Under the initial terms of the deal, which would have seen GMP acquire outstanding Richardson GMP shares for two common shares of GMP for each Richardson share, existing GMP shareholders and Richardson GMP investment advisors would have held 30.7% and 29.6% of GMP, respectively.
The largest shareholder, Richardson GMP Financial Group would control approximately 39.7%.
GMP also announced it has cancelled all non-essential travel, and is requiring that face-to-face meetings take place online.
“We continue to monitor closely the growing concerns about the spread of Covid-19 and are following the advice and guidance of public health authorities in an effort to help minimize the spread of the virus,” said Kish Kapoor, GMP’s interim president and CEO. “Like you, we are understandably concerned, and as we have watched the situation unfolding it has become necessary to take these prudent steps.”