Canada's Big Banks and Pensions Bid for TMX

(May 17, 2011) — A consortium of four of Canada’s six largest banks and five large pension funds have placed a $3.7 billion rival bid for the operator of the Toronto Stock Exchange (TSE).

The group of financial companies — dubbed Maple Group Acquisition Corp. — said they have submitted a proposal to the board of TMX Group, which operates the Toronto Stock Exchange, worth about 20% higher than the opposing London Stock Exchange (LSE) bid.

Maple’s investors, according to The Washington Post, include: Alberta Investment Management Corporation, Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, CIBC World Markets Inc., Fonds de solidarite des travailleurs du Quebec, National Bank Financial Inc., Ontario Teachers’ Pension Plan Board, Scotia Capital Inc. and TD Securities Inc.

“The Board of Directors of TMX Group, in accordance with its fiduciary duties and with counsel from its financial and legal advisers, will fulfill its legal responsibility and will evaluate the proposal,” TMX said in a statement issued soon after one by Maple Group.

TMX said the Maple proposal “is not binding and was prepared for discussion purposes,” and involves “a number of significant conditions, including regulatory approval for the combination of TMX Group with both Alpha Group and CDS Inc., but does not specify the means for satisfying these conditions.”

“We believe that on completion of that review, the applicable provisions of the Competition Act will be satisfied,” said Luc Bertrand, Maple Group spokesman and vice-chairman of National Bank of Canada, a large TMX shareholder, the Wall Street Journal reported. While pension funds would own 35% of the new entity, the bank-owned dealers would own 25%, with the remaining 40% held by the public. Meanwhile, No single shareholder would own more than 10% of TMX, in line with regulations.