GMP Capital Inc.'s former CEO, Kevin Sullivan, is urging stockholders of the Toronto-based financial company to vote against the proposed deal to buy the remaining shares of hedge fund Richardson GMP Ltd. from asset manager Richardson Financial Group Ltd.

Sullivan on Sept. 15 released an information circular describing "compelling" reasons to reject the transaction, ahead of the Oct. 6 GMP Capital stockholders' meeting.

Sullivan, who was CEO of GMP Capital until 2010, said that while the idea of acquiring the shares is sound, the terms negotiated by GMP Capital's existing board are not. He said the deal is financially unfair to GMP Capital shareholders and favors the interests of Richardson Financial Group over the interests of GMP Capital's other shareholders.

GMP Capital's push for consolidating ownership of Richardson GMP is part of its strategy to expand its wealth management business.

Sullivan, who still owns about 4% of GMP Capital's outstanding common shares, pushed for the election of five independent directors to the GMP board, including Ted Goldthorpe, partner and head of credit at BC Partners, and David Goodman, former head of global asset management at Bank of Nova Scotia.

In a letter to stockholders, Sullivan said the terms of the proposed deal gives effective control of GMP Capital to the Richardson family, with the party's stake rising to 40.1% from 24.1%, without paying a control premium. Sullivan proposed altering the deal to be fair to all stockholders.

Earlier, Anson Funds Management LP, which manages funds that hold about 8.5% of GMP Capital's minority shares, announced its opposition to the deal, saying the deal undervalues GMP Capital and is detrimental to minority stockholders. The firm also raised concern about the Richardson family taking actual control of GMP Capital at "significantly less than fair value and without paying a control premium."