GMP Capital Inc provides update on the potential RGMP transaction due to Coronavirus

Toronto, March 16, 2020 – GMP Capital Inc. (“GMP” or the “Company”) (TSX: GMP) today provided an update on the previously announced transaction (the “RGMP Transaction”) to consolidate the ownership of Richardson GMP Limited (“Richardson GMP”). On February 26, 2020, the Company announced that it entered into a non-binding term sheet with Richardson Financial Group Limited (“RFGL”) in furtherance of the RGMP Transaction and that it anticipated entering into a definitive agreement shortly following the end of a contractual 15 business day notice period under the Shareholders’ Agreement governing Richardson GMP. In light of the ongoing COVID-19 outbreak and recent market volatility, the Company, RFGL and the two elected investment advisor representatives on the board of Richardson GMP no longer expect that the definitive agreement concerning the Potential RGMP Transaction will be entered into in the time period initially anticipated and, therefore, the special meeting of common shareholders called for April 21, 2020 has been postponed.  The parties are continuing to work toward entering into a definitive agreement and remain hopeful that they will do so in the future.  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.  GMP does not intend to provide further updates regarding its ongoing discussions relating to the RGMP Transaction, except as required by applicable securities laws or the policies of the Toronto Stock Exchange. 

The Company also announced several other responses to the ongoing COVID-19 outbreak. Specifically, the Company announced that it is cancelling all non-essential travel and, until further notice, has mandated that all face to face meetings be conducted online.  The Company takes its responsibility seriously to do all that it can to play its part in the community to keep everyone safe and healthy. 

Kish Kapoor, Interim President and Chief Executive Officer, stated. “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. Like you, we are understandably concerned, and as we have watched the situation unfolding it has become necessary to take these prudent steps.” 

FORWARD-LOOKING INFORMATION 

This press release contains “forward-looking information” as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management’s beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management.  The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.  

The forward-looking statements included in this press release, including statements regarding the RGMP Transaction and the execution of any of the Company’s potential plans, are not guarantees of future results and involve numerous risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements. In respect of the forward-looking statements and information concerning the consolidation of 100% of ownership in Richardson GMP, and the Company’s strategy going forward, management has provided same based on reliance on certain assumptions it considers reasonable at this time including that a transaction involving Richardson GMP can be completed on acceptable terms and that any conditions precedent can be satisfied.  There is no assurance that any transaction involving Richardson GMP will result from the discussions with RFGL or on what terms or structure any transaction may occur as proposed or at all, including the timing of the completion of any transaction involving Richardson GMP. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. 

Risks and uncertainties related to the RGMP Transaction include, but are not limited to: failure of GMP and RFGL to enter into the RGMP Transaction on satisfactory terms, or at all; failure of GMP and RFGL to obtain the required shareholders and regulatory approvals for, or satisfy other conditions to effect, the RGMP Transaction; the risk that the RGMP Transaction may involve unexpected costs, liabilities or delays; the risk that, prior to or as a result of the completion of the RGMP Transaction, the business of GMP and/or Richardson GMP may experience significant disruptions, including loss of clients or employees due to transaction related uncertainty, industry conditions or other factors; risks relating to employee retention; the risk that legal proceedings may be instituted against GMP or Richardson GMP; risks related to the diversion of management’s attention from GMP’s ongoing business operations and risks related to the COVID-19 outbreak.  For a description of additional risks that could cause our actual results to materially differ from our current expectations, see the “Risk Management” and “Risk Factors” sections of GMP’s most recent Annual MD&A and the “Risk Factors” section in the Company’s AIF. For additional information on the risk factors related to the RGMP Transaction, see “The Sale Transaction – Reasons for the Sale Transaction” 
and “The Sale Transaction – Risk Factors” in GMP’s Notice of Special Meeting and Management Information Circular dated July 8, 2019 (the “July 2019 Circular”). Material assumptions and factors underlying the forward-looking information in this press release include, but are not limited to, those set out in “Business Environment – Outlook” in GMP’s most recent Annual MD&A. GMP’s most recent Annual MD&A and July 2019 Circular are filed under the Corporation’s profile on SEDAR at www.sedar.com. 

Although forward-looking information contained in this press release is provided based on management’s reliance on certain assumptions it considers reasonable, there can be no assurance that such expectations will prove to be correct. Certain statements included in this press release may be considered a “financial outlook” for purposes of applicable Canadian securities laws, and as such, the financial outlook may not be appropriate for purposes other than this press release. Readers should not place undue reliance on the forward-looking statements and information contained in this press release. When relying on forward-looking statements to make decisions, readers should carefully consider the foregoing factors, the list of which is not exhaustive.  

The forward-looking information contained in this press release is made as of the date of this press release, and should not be relied upon as representing GMP’s views as of any date subsequent to the date of this press release. Except as required by applicable law, Management and the Board undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise. 

ABOUT GMP CAPITAL INC. 
GMP currently operates through two business segments; Operations Clearing and Wealth Management; and a corporate segment.  Operations Clearing will continue to provide carrying broker services to Richardson GMP and will provide carrying broker services to Stifel’s Canadian capital markets business, including trade execution, clearing, settlement, custody, and certain other middle- and back-office services, and other expenses associated with providing such services. Wealth Management consists of GMP’s non-controlling ownership interest in Richardson GMP. Richardson GMP, one of Canada’s largest independent wealth management firms, is focused on providing exclusive and comprehensive wealth management and investment services delivered by an experienced team of investment professionals. GMP is listed on the Toronto Stock Exchange under the symbol “GMP”. For further information, please visit our corporate website at gmpcapital.com. 

For further information please contact: 

GMP Capital Inc. 
Rocco Colella, Director, Investor Relations 
145 King Street West, Suite 200, Toronto, Ontario M5H 1J8 
Tel: (416) 941-0894; Fax: (416) 943-6175 
[email protected] or [email protected]