Maple group’s bid for TMX faces several hurdles

The 13 Canadian banks, pensions and insurers that aborted London Stock Exchange Group Plc's bid for TMX Group Inc are now facing their own challenges in buying the country's main equity and derivatives exchanges.

The consortium, Maple Group Acquisition Corp, comprising companies including Toronto-Dominion Bank and Manulife Financial Corp, still needs to win over TMX management and shareholders, even as it convinces regulators that its proposed near monopoly on stock trading would not stifle competition.

Though the promise of more money and an exchange controlled by Canadians served well to derail the LSE bid, competition authorities would not be impressed enough to hold back inquiries. Maple would also need to convince 70 per cent of TMX shareholders to support its offer. The bid is to expire on 8 August.

The London and Toronto exchanges said yesterday they would not proceed with their proposed C$3.32 billion ($3.4 billion) merger, as they failed to get support from TMX shareholders controlling at least two-thirds of the company.

TMX shares were up 1.5 per cent to C$44.20 yesterday following scrapping of the deal. Maple has offered C$50 a share, with around 80 per cent of the payment in cash.

Following the LSE transaction collapse, Toronto-based TMX said it would consider alternatives, including remaining independent.