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A GMP founder and former CEO says he opposes the terms of GMP Capital’s proposed deal with Richardson Financial Group to buy all shares of Richardson GMP.

Kevin Sullivan said Friday that he believes the deal’s revised terms announced last month “unduly favour” Richardson Financial Group at the expense of GMP’s other shareholders, and that the deal will not be approved.

Sullivan held a number of top roles at GMP before resigning from his position as deputy chair earlier this year. He beneficially owns, directly or indirectly, about 4% of GMP’s outstanding common shares, he said in a press release on Friday.

Sullivan said he will propose new directors for election at GMP’s shareholder meeting on Oct. 6, when the vote on the transaction is scheduled to take place.

Sullivan’s opposition to the deal follows that of Anson Funds, a firm that manages investment funds that collectively hold approximately 8.5% of GMP Capital’s minority shares.

Anson said Thursday that 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.”

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.

Under the revised terms, Richardson Financial Group will have an estimated aggregate ownership position of approximately 40% 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.

Sullivan said he has advised GMP of the transaction terms he would support and that he will file an information circular with securities regulators containing that information. Those terms would be more favourable to the Richardson GMP investment advisor shareholders, he said.

In a statement on Friday, GMP Capital acknowledged that “a dissident shareholder” intends to propose new directors for election on Oct. 6. The firm will file a management information circular next week laying out the deal’s benefits, it said, and explaining why the board disagrees with “the dissident.”

“The transaction will best position GMP to capitalize on the compelling opportunities in the wealth management industry, which the company believes offers the greatest potential for long-term value creation for its shareholders,” the firm said.