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May 17, 2011

New TMX takeover proposal eyes foreign expansion

TORONTO (Reuters) – A proposal by a group of Canadian banks and pension funds to take over the operator of the Toronto Stock Exchange offers cost savings and opportunities for international growth, the group said on Monday.

A consortium calling itself the Maple Group Acquisition Corp is proposing a C$3.6 billion ($3.7 billion) deal to buy TMX Group, aiming to derail a $3 billion friendly bid for the exchange operator by the London Stock Exchange.

May 16, 2011

Canada faces tough choices on TMX’s fate

OTTAWA/TORONTO, May 16 (Reuters) – Canada faces some tough
decisions over the fate of the Toronto Stock Exchange — does
it allow a foreign takeover, or should it opt for a deal giving
the country’s biggest banks a near-monopoly position?

A C$3.6 billion proposal for exchange operator TMX Group
(X.TO: Quote, Profile, Research, Stock Buzz), from a group of Canadian banks and pension funds called
Maple Group Acquisition Corp, is dependent on the TMX
swallowing up Alpha Group — an alternative trading system that
has been eating into TMX market share.

May 16, 2011

Dealtalk: Canada facing tough choices on bids for exchange

OTTAWA/TORONTO (Reuters) – Canada faces some unpalatable decisions over the fate of the Toronto Stock Exchange — does it allow a foreign takeover, or should it opt for a deal giving the country’s biggest banks a near monopoly position?

A C$3.6 billion proposal for exchange operator TMX Group (X.TO: Quote, Profile, Research, Stock Buzz), from a specially created group of Canadian banks and pension funds called Maple Group Acquisition Corp, is dependent on the TMX swallowing up rival Alpha Group — an alternative trading system that has been eating into TMX market share.

May 16, 2011

Canada facing tough choices on bids for exchange

OTTAWA/TORONTO, May 16 (Reuters) – Canada faces some
unpalatable decisions over the fate of the Toronto Stock
Exchange — does it allow a foreign takeover, or should it opt
for a deal giving the country’s biggest banks a near monopoly
position?

A C$3.6 billion proposal for exchange operator TMX Group
(X.TO: Quote, Profile, Research, Stock Buzz), from a specially created group of Canadian banks and
pension funds called Maple Group Acquisition Corp, is dependent
on the TMX swallowing up rival Alpha Group — an alternative
trading system that has been eating into TMX market share.

May 16, 2011

Canada banks TMX bid tops LSE, but logic questioned

TORONTO, May 15 (Reuters) – A group of Canadian banks and
pension funds are hoping their C$3.6 billion ($3.7 billion)
offer for TMX Group will keep the nation’s largest stock market
from falling into foreign hands, but questions remained on
Sunday whether that is reason enough to succeed.
    The C$48 per share offer for TMX from a consortium
calling itself the Maple Group Acquisition Corp topped a $3
billion friendly bid for the exchange operator from the London
Stock Exchange .
    Maple Group includes banks that have opposed the LSE deal,
arguing it would put control of TMX into foreign hands and
threaten Toronto’s growing status as a world financial center.
    But experts said the Maple Group’s bid appeared to have the
sole purpose of blocking the LSE deal from going through and
questions remained about the rationale of such a move.
    “The onus is on them to show us why they are doing this,”
said Alison Crosthwait, director of global trading strategy at
Instinet. “They are going to have to make a case for doing this
other than just blocking the LSE bid.”
    Maple said it plans to combine TMX with alternative trading
system Alpha Group and clearing hub Clearing and Depository
Services Inc to broaden the exchange operator’s business, create
growth opportunities and generate cost savings.
    It said a deal would create an integrated trading and
clearing exchange for equities, bonds, energy products and
derivatives in exchange-traded and over-the-counter markets,
following a model used by others such as Germany’s Deutsche
Boerse (DB1Gn.DE: Quote, Profile, Research, Stock Buzz).
    In some respects the offer goes counter to attempts by other
exchange operators to diversify internationally through
consolidation. Deutsche Boerse has a deal to buy NYSE Euronext
, although that’s being challenged by Nasdaq OMX
and IntercontinentalExchange .
    LSE and TMX had also touted their deal, announced in
February, as creating a more diversified and international
company.
    Still, the Maple offer puts LSE in a tight spot, forcing it
to fend off the rival bid as it seeks to rejuvenate its
centuries-old business.
    If LSE boss Xavier Rolet were to better his terms, it would
undermine claims the LSE and TMX are equal merger partners in
their deal, something Rolet has stressed in the past to soothe
nationalist nerves in Canada. [ID:nN15231807]
    Ontario-based TMX has said its board is analyzing the Maple
proposal but it is continuing to pursue the regulatory permits
required for the LSE deal. Besides the Toronto Stock Exchange,
TMX also owns TSX Venture Exchange for small-cap stocks and the
Montreal Exchange for derivatives trading.
    
    ‘MADE IN CANADA’ SOLUTION
    The all-Canadian bid is seen facing fewer regulatory hurdles
than the one from London, which must pass regulatory muster at
federal and provincial levels and which has come under fire from
the banks, mining companies and politicians.
    The Maple proposal would have to be approved by the Canadian
Competition Bureau, but would not face review under the net
benefit to Canada test that foreign acquirers face.
    “I expect the worse that could happen here is that they
would demand certain conditions be put in place,” said a lawyer
from one of Canada’s largest corporate law firms who has been
watching the situation. He asked to remain anonymous because it
was against his company’s policy to comment on such matters.
    “I would expect this ‘made in Canada’ solution to be
approved.”
    Neither the acquisition of TMX Group, nor a subsequent
combination of Alpha or CDS, requires approval under the
Investment Canada Act.
    Instinet’s Crosthwait said there would be an issue with
banks buying the exchange operator.
    “The same people who are advising and structuring securities
will now also own the exchange where they are listed,”
Crosthwait said. “But this is not insurmountable.”
    
    MAPLE BID
    Banks in the Maple group include CIBC World Markets,
National Bank Financial, Scotia Capital and TD Securities Inc.
The same banks are advising on the deal.
    Maple also consists of five pension funds — including
Alberta Investment Management Corporation, Caisse de depot et
placement du Quebec, Canada Pension Plan Investment Board, Fonds
de solidarite des travailleurs du Quebec (F.T.Q.) and Ontario
Teachers’ Pension Plan Board.
    Under the terms of its proposal, Maple Group would acquire
all shares of TMX for C$48 in cash per TMX share or one common
share of Maple per TMX share, in each case subject to proration.
    The maximum cash payable under the proposal is C$2.5 billion
and the maximum number of Maple shares issuable is 22.5 million.
    On a prorated basis, Maple said each TMX Group share would
be exchanged for C$33.52 in cash plus 0.3016 of a Maple share.
It said the proposal represented a 24 percent premium to the
implied value of the LSE’s offer.
    On completion of the transaction, shareholders of TMX  would
own about 40 percent of Maple’s outstanding shares. Pension fund
investors would own about 35 percent and the bank-owned
investment dealers would own 25 percent.
    No shareholder of Maple would own more than 10 percent of
Maple’s total shares outstanding, Maple said.
    (Reporting by Pav Jordan in Toronto; Editing by Richard
Chang and Paritosh Bansal)
 

(Created by Dhara Ranasinghe)

May 15, 2011

Canada banks TMX bid tops LSE, but doubts remain

TORONTO (Reuters) – A group of Canadian banks and pension funds are hoping their C$3.6 billion offer for TMX Group will keep the nation’s largest stock market from falling into foreign hands, but questions remained on Sunday whether that is reason enough to succeed.

The C$48 per share offer for TMX from a consortium calling itself the Maple Group Acquisition Corp topped a $3 billion (1 billion pound) friendly bid for the exchange operator from the London Stock Exchange.

May 15, 2011

Maple Group proposes C$3.6 bln for TMX

TORONTO, May 15 (Reuters) – Maple Group Acquisition Corp, a
consortium of Canadian banks and pension funds, said its
takeover proposal for the TMX Group valued the nation’s largest
stock market operator at C$3.6 billion.

The all-Canadian, cash and equity takeover proposal from
Maple Group offers C$48 a share for TMX Group (X.TO: Quote, Profile, Research, Stock Buzz) and trumps
a friendly $3 billion bid from the London Stock Exchange
(LSE.L: Quote, Profile, Research, Stock Buzz), which critics say would move control of the country’s
largest stock market to London.

May 14, 2011

Canada banks propose TMX deal to rival LSE bid

TORONTO (Reuters) – TMX Group, operator of the Toronto Stock Exchange, has received a takeover proposal from a group of Canadian banks and pension funds that rivals a friendly $3 billion bid from the London Stock Exchange.

TMX, in a statement on Saturday, did not say how much the financial institutions — known as Maple Group Acquisition Corp — were prepared to pay, only that the proposal was above the current market price for TMX shares.

May 11, 2011

Russia’s Intergeo eyes Toronto IPO

TORONTO, May 11 (Reuters) – Intergeo, the Russian copper
and nickel company owned by billionaires Mikhail Prokhorov and
Maxim Finskiy, hopes to raise from C$100 million to C$500
million in a initial public offering on the Toronto Stock
Exchange by the end of the year.

Finskiy, the company’s chairman and 20 percent stakeholder,
told Reuters in an interview on Wednesday the company would
float about 10 percent of its shares in the offering.

May 11, 2011

Russia’s Intergeo eyes multibillion-dollar IPO

TORONTO, May 11 (Reuters) – Intergeo, the Russian copper
and nickel company owned by billionaires Mikhail Prokhorov and
Maxim Finskiy, hopes to raise several billion dollars in a
initial public offering on the Toronto Stock Exchange by the
end of the year.

Finskiy, the company’s chairman and 20 percent stakeholder,
told Reuters in an interview on Wednesday the company would
float about 10 percent of its shares in the offering.