TORONTO, June 3 (Reuters) - London Stock Exchange Group (LSE.L) and its takeover target, TMX Group (X.TO), said on Friday Canadian competition authorities won’t challenge the proposed combination of two exchange operators.
The issuance of the no action letter, which was expected, satisfies a condition of a Feb. 9 agreement by LSE and the company that operates the Toronto Stock Exchange to join forces in a $3 billion deal.
The deal faces a separate review under the Investment Canada Act, under which the federal industry minister will decide whether TMX’s combination with the foreign-based LSE will carry a net benefit to the country.
The exchanges said on Wednesday the British listings authority and the Ontario Superior Court of Justice approved their merger prospectus. [ID:nLDE750352]
The approvals pave the way for shareholder votes in London and Toronto on June 30.
A consortium of nine major Canadian banks and investment funds called Maple Group Acquisition Corp has made a hostile offer for TMX worth C$3.6 billion ($3.7 billion). [ID:nN26282442]
The LSE proposal was not expected to raise any red flags from Canadian competition authorities, unlike the Maple bid.
The Maple bid would involve TMX acquiring Alpha Group, the main alternative trading system in Canada, which competes directly with the TMX’s Toronto Stock Exchange and the Toronto Venture Exchange.
The Maple deal won’t face an Investment Canada review because the group is made up of Canadian-based investors.
$1=$0.98 Canadian Reporting by John McCrank; Editing by Frank McGurty