* Bertrand was architect of deal that created TMX
* Says proposal is logical for TMX growth
By Pav Jordan and John McCrank
TORONTO, May 17 An insider with a raft of
political connections is steering a proposed C$3.6 billion
made-in-Canada takeover of the country's largest exchange
operator as Canadian banks fight off a foreign bid.
Luc Bertrand, who helped create the TMX Group (X.TO) in
2008, wants to derail a $3 billion offer from the London Stock
Exchange (LSE.L) and keep Canada's biggest stock market in
As spokesman for Maple Group Acquisition Corp, named for
Canada's Maple Leaf flag and set up solely to bid for the TMX,
he says he wants to move the exchange operator to a new level
by merging it with Alpha, a bank-owned alternative trading
system that has taken away TMX market share.
"He's very astute and he understands the exchange world,"
said Georges Ugeux, chief executive of Galileo Global Advisors,
a New York-based, cross-border merger advisory firm that worked
on several past exchange deals.
"They will succeed on the basis of the premium, and on the
basis that this deal just wouldn't have happened without power
FACTBOX: Next steps for the LSE [ID:nLDE74G14O]
TIMELINE: The Maple has landed [ID:nLDE74G235]
DEALTALK: Maple, LSE arguments [ID:nLDE74G1L7]
FACTBOX: Global exchange merger activity [ID:nLDE74F1BL]
BREAKINGVIEWS: Canada's homegrown TMX bid [ID:nLDE74F0M8]
The well-connected Bertrand is point man on government and
corporate affairs at National Bank of Canada (NA.TO), the
smallest of four Canadian banks in the Maple consortium.
Five pension funds have joined the banks in a proposal that
Bertrand said had been under discussion for a while.
"When the LSE came out with its offer, it got many of us on
the phone talking to each other and kicking around the old idea
that we've had for a long time," he said.
Maple's proposal would circle Bertrand back to the TMX, a
company he helped create when the Toronto Stock Exchange
acquired the smaller Montreal Exchange in 2008, although he
says he has no plans to leave National.
Bertrand, 56, had been chief executive of the Montreal
exchange but the TMX board passed him over when it picked
current CEO Tom Kloet to head the exchange.
He is on first-name terms with many of Canada's regulators
and has links to Ottawa that date back to the late 1970s, when
he became a parliamentary assistant right out of university.
"It's been a large percentage of my career, talking with
the regulators, and I know many of them and I know the
regulatory process," Bertrand told Reuters on Tuesday.
The Maple proposal needs approval from Canada's independent
Competition Bureau and provincial securities commissions. But
unlike the LSE offer, it does not need approval from provincial
regulators or from Canadian Industry Minister Tony Clement.
The LSE says its all-stock proposal will create a
Transatlantic powerhouse that will be particularly active in
mining and minerals, two of the TMX's strongest suits.
But the bid has faced a nationalistic backlash from
Canadian politicians and businessmen, who say it would leave a
domestic crown jewel in foreign hands.
The Maple proposal, for its part, would create a group that
controls more than 80 percent of Canadian stock trading by
volume, a near monopoly that analysts say could be hard to get
Bertrand dismissed that concern.
"This idea, this concept, it's not brand new," he said in
an interview, describing the Maple Leaf proposal as the "next
logical step" to the Toronto-Montreal combination.
"In creating a silo model for the TMX Group, there is huge
opportunity to create growth, provide better service, and run a
company more efficiently, and that will be good for everybody,
not only shareholders, but for the Street and the users"
Bertrand said the Maple Group wants to build TMX into a
vertically integrated exchange group that offers a one-stop
shop for trading and clearing in a series of asset classes.
TMX owns the TSX Venture Exchange for small-cap stocks and
the Montreal Exchange for derivatives trading as well as the
Toronto Stock Exchange.
Bertrand spent nearly eight years building the Montreal
exchange into a profitable derivatives bourse of global
standing after an early career that included stints as a
parliamentary aide, a political analyst and a stockbroker.
He is part-owner of the storied Montreal Canadiens hockey
team, after buying into the National Hockey League franchise in
He joined National Bank this year.
"You really have to dig deep to find the motivation of the
banks for doing this," said Thor Koeppl, an economic professor
at Queen's University in Kingston, Ontario, injecting a note of
skepticism to the debate.
"On the trading side, the only the way I can rationalize
this bid by the banks is they are kind of freaked out over
losing business, losing revenues, essentially through fees."
(Additional reporting by Jonathan Spicer and Solarina Ho;
Editing by Janet Guttsman and Frank McGurty)