Four more financial institutions have joined Maple Group Acquisition Corp's plan to mount a hostile bid for the TMX Group and top a friendly offer from the London Stock Exchange Group, the consortium of Canadian banks and pension funds said Sunday.
Desjardins Financial Group, GMP Capital Inc, Dundee Capital Markets and Manulife Financial have agreed to join Maple's C$3.6 billion (US$3.7 billion) bid for the operator of Canada's main bourse.
Maple Group, which takes its name from Canada's patriotic maple leaf symbol, says its offer is financially superior to the roughly US$3.4 billion all-stock bid from the London exchange and would keep ownership of the TMX within the country's borders.
Maple Group's original bank members were Toronto Dominion Bank, Canadian Imperial Bank of Commerce, National Bank of Canada and the Bank of Nova Scotia.
Five pension funds also formed part of the original group: Alberta Investment Management Corp, Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, Fonds de solidarite des travailleurs du Quebec (FTQ) and Ontario Teachers' Pension Plan Board.
Maple, which is expected to take its hostile bid to TMX shareholders any day now, has less than three weeks to convince investors its "all-Canadian" alternative is better for the country's capital markets. Shareholders will vote on the TMX-LSE deal June 30.
The Maple bid -- which partly hinges on regulatory approval of the acquisition of Alpha Group, Canada's leading alternative trading system, and the CDS clearinghouse -- will face antitrust scrutiny, as the Alpha/CDS component of the proposal would give the new entity a big share of the Canadian market.
Six of the 13 Maple members are owners of Alpha, which competes with TMX's Toronto Stock Exchange. Integrating Alpha would give TMX more than 80 percent of the trading market.
Investors who spoke to Reuters in a recent poll signaled that the outcome remained uncertain, with many hoping Maple's circular would provide more details on its bid.
A source with knowledge of the Maple proposal said the circular would not give specifics on the Alpha and CDS valuations, but would provide additional details, including the structure of Maple's C$48-a-share offer.
While Maple faces Canada's Competition Bureau, the LSE bid must win approval under the Investment Canada Act, which requires foreign takeovers to provide a "net benefit" to Canada. Provincial regulators also have a say, but those hurdles are considered less onerous.
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