LSE faces TMX tussle as Maple goes hostile

  • Business
  • Friday, 27 May 2011

LONDON: The London Stock Exchange (LSE) faced an increasingly bitter battle for control of Canadian peer TMX Group and its own destiny after rival bidder Maple Group took its higher offer directly to shareholders.

The Maple Group of Canadian banks and pension funds turned hostile on Wednesday with its C$3.6bil (US$3.7bil) bid after TMX's board rejected the offer although it trumps the LSE's US$3bil agreed all-paper bid.

Maple, whose group includes some of TMX's top customers, said it was forced to circumvent the board after TMX and the LSE said shareholders would vote on the deal on June 30.

“By accelerating the timing of their meeting to consider the LSE takeover, they have given us no choice but to make our offer available directly to TMX Group shareholders,” said Luc Bertrand, lead spokesman for the Maple Group and vice chairman of National Bank of Canada, one of the Maple banks.

The hostile approach by Maple, which hopes to galvanise simmering nationalistic opposition to a foreign takeover of Canada's main exchange, leaves TMX shareholders facing a decision that could determine not only the fate of TMX but also that of the LSE.

Scooping up TMX is likely to make the LSE too large to be a realistic takeover target for rivals such as US 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.

But Maple still faces an uphill struggle.

The decision by Nasdaq to walk away from its hostile US$11.2bil bid for transatlantic peer NYSE Euronext amid regulatory opposition last week prompted some industry experts to warn that unsolicited exchange bids faced a bumpy road.

Maple can certainly bank on its Canadian credentials helping soothe political worries about foreign takeovers. Reuters

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