Deals wrap: Maple’s hostle bid for TMX may change exchange landscape

May 26, 2011

The London Stock Exchange faced an increasingly bitter battle for control of Canadian peer TMX Group after rival bidder Maple Group took its higher offer directly to shareholders.

Maple Group of Canadian banks and pension funds hostile $3.7 billion bid for TMX hopes to galvanize simmering nationalistic opposition to a foreign takeover of the country’s main exchange.

While the LSE is countering with the argument that its takeover would give TMX a launching point to the international stage, TMX shareholders’ decision could determine not only the fate of TMX but also that of the LSE.

Scooping up TMX would likely make the LSE too large to be a realistic takeover target for rivals such as U.S. exchange Nasdaq OMX and the Singapore Exchange, both of which have seen their merger plans dashed in recent weeks.

If it fails, it risks being left a sitting duck as predators circle.

In other news, Freescale Semiconductor, bought by buyout firms near the peak of the private equity boom in 2006, raised a less-than-expected $783 million in its initial public offering.

Freescale was taken private in 2006 in a $17.6 billion buyout, a deal that has been described by some investors as one of the most unsuccessful because it left Freescale with massive debt, hurting its ability to compete in the investment-intensive chip market.

Increasingly, the Deal Journal remarked, the IPO market is looking like a tale of haves and have nots. And Freescale’s debut would seem to be another tick in the have not category.

Finally, Citic Securities will raise about $1.6 billion through its planned Hong Kong initial public offering, instead of the previously expected $3 billion.

Breakingviews columnist John Foley says Hong Kong is turning into a buyer’s market for new stock offers.

Companies are queuing up to issue some $54 billion through initial public offerings, $1 billion more than 2010, a record year. This means investors will have the upper hand and issuers will have to accept modest valuations or pass.



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