Combining Canada's stock exchanges with alternative trading system Alpha Group and the country's major clearing hub would benefit Canadian capital markets, the Maple Group consortium, which is making hostile take-over bid for stock exchange operator TMX Group, said on Monday.
The Maple Group - made up of Canadian banks and other financial institutions - took its $3.8 billion takeover bid for TMX, which operates the Toronto Stock Exchange, directly to TMX shareholders on Monday. It is trying to scupper a rival, friendly offer for TMX from the London Stock Exchange Group ahead of a June 30 vote on the LSE bid. Once it buys TMX, it plans to combine it with Alpha and clearing hub Clearing and Depository Services, which are both already largely controlled by the banks.
Maple said its plan would benefit Canadian markets as it would result in an integrated trading and clearing exchange for equities, bonds, energy products and derivatives in both exchange-traded and over-the-counter markets. Persuading TMX shareholders that its offer can pass regulatory muster will be key to the success of the Maple Group bid as its plans have raised competition concerns. A combined TMX and Alpha would account for about 80 percent of Canadian stock trading by volume.
In its official takeover circular, Maple sought to address shareholder concerns about the price it would be pay to combine Alpha and CDS with TMX. It said it would form a committee of its independent directors to oversee the process of evaluating the assets.
Comments
Comments are closed for this article.