GMP highlights overwhelming support from investment advisors, reiterates beneficial terms of transaction
The saga continues for GMP’s proposed total acquisition of wealth-management company Richardson GMP (RGMP).
In a press release, GMP board chair Donald Wright urged common shareholders of RGMP to reject an unnamed dissident’s claim that “he supports the concept of the RGMP Transaction, even as he opposes its terms.”
The release comes a couple of days after Kevin Sullivan, a former CEO of GMP Capital, said in a regulatory filing that “the terms negotiated by GMP’s existing board are not [good].”
Wright called the terms of the proposal “fair and balanced,” stressing that they are “designed to drive long-term gains in shareholder value.” He also panned a suggestion that funds designated by the board for investment in growth instead be used for a share buyback. He warned that a blocked transaction would result in value destruction as RGMP advisors could be panicked into joining other wealth companies.
“Richardson GMP Investment Advisors representing approximately 97% of Richardson GMP's assets under administration have indicated their support for the terms of the RGMP Transaction,” the press release said, referring to a survey of RGMP advisors announced on September 15.
“Richardson GMP’s Investment Advisors believe that the RGMP Transaction is the best –by far the best–plan to optimally position the combined firms for future growth,” Richardson GMP Investment Advisors Marc Dalpé and Neil Bosch, the Investment Advisor representatives on the Richardson GMP Board, said of the proposed deal.
GMP underscored that RGMP has significant room to recruit without additional selling, general and administrative expense. It highlighted the need to deploy capital toward aggressively recruiting high-quality investment advisory teams to keep up with competitor firms making similar moves.
“Beyond funding future growth, GMP intends to use its capital to service current indebtedness and preferred share obligations and provide resilience in the current unprecedented and uncertain economic environment,” the release said. “This is prudent and responsible.”
