More than a week after TD Bank
extended a preliminary offer to buy wealth management firm Richardson GMP
, sources said that the relationship between the two firms has soured and come to an end, according to a report by the Financial Post
“Deal’s off,” said one well-placed source simply. Others familiar with the situation indicated a slew of factors that foiled the deal, including the time it had taken, how it became public, and the fact that there was no indication from management as to the state of play.
“In the end everybody became exasperated,” said another source who added that the rumored $600 million offer from TD included $160 million to repay debt. Litigation was another concern, said the source, noting that the firm and/or its advisors are facing legal actions in Calgary, Toronto, and Montreal. TD’s due diligence and evaluation of pending lawsuits affected the amount it would be willing to pay for the money manager that boasts assets under management of $27 billion.
TD was also concerned that many of the brokers wanted to remain independent and not work for a bank. “This is great for clients. They will continue to get independent advice,” said one of the advisors. “This is the best possible outcome.”
With the deal off the table, Richardson GMP will remain independent with three groups of shareholders: James Richardson & Sons., GMP Capital and the employee/advisers. A call asking Richardson GMP CEO Andrew Marsh
for comments was not returned.