* Maple Group files C$3.7 billion hostile bid for TMX
* Bid proposes C$48 a share cash for 70 percent of shares
* Maple urges shareholders to vote against LSE's agreed bid
By Solarina Ho
TORONTO, June 13 Maple Group launched a C$3.7
billion ($3.8 billion) hostile bid for Toronto Stock Exchange
operator TMX Group (X.TO) on Monday, an all-Canadian challenge
to the London Stock Exchange's (LSE.L) agreed bid.
The Maple Group consortium's long-awaited official bid
proposed C$48 a share cash for 70 percent of shares, compared
with 60 percent in the original proposal nearly a month ago.
The group, comprised of four leading banks, five top pension
funds and four new institutional investors, said in a takeover
circular to shareholders that its offer was "superior" in value
and provided greater certainty for TMX shareholders.
The C$3.7 billion figure is based on C$48 multiplied by the
number of fully diluted shares, Maple said. Previously, the
C$3.6 billion value of the proposed offer was calculated based
on the number of basic shares outstanding.
With less than three weeks left until investors vote for the
LSE-TMX deal, the Canadian consortium urged shareholders to vote
against its rival. Maple's bid dies if TMX shareholders vote for
LSE's $3.4 billion offer on June 30.
"TMX Group shareholders should be aware that Maple's offer
can only proceed if the LSE take-over plan does not," Luc
Bertrand, Maple's chief spokesman and vice-chairman of
Quebec-based National Bank, said in a statement.
Unlike LSE shareholders, TMX investors do not get a second
vote if there are conditions attached to any regulatory
approvals that may come after June 30.
The consortium said in its circular that unlike LSE's
all-stock offer, Maple's bid offers cash to shareholders and
would maintain TMX's current dividend. It also disputed LSE and
TMX's assertion that the transatlantic tie-up would enhance
liquidity for Canadian capital markets.
The heads of TMX and LSE, Tom Kloet and Xavier Rolet, said
on Friday their bid was different from other transatlantic
exchange tie-ups in that it focused on growth and building new
businesses rather than cost and revenue savings. [ID:nN10178486]
LSE's planned takeover must pass muster with the Canadian
government, which will decide if it meets the terms of the
Investment Canada Act, which says foreign takeovers must carry a
"net benefit" to Canada. [ID:nN07117538]
"We think we're in quite good shape now," Kloet told a
global exchanges conference hosted by Sandler O'Neill in New
York on Friday. He said the company was "in active dialogue"
with the government over the deal.
NO BOARD CHANGES
In addition, Maple said it would maintain the current CEO
and senior management as well as existing commitments regarding
The valuation of Alpha Group, Canada's main alternative
trading platform and the CDS clearinghouse -- two entities Maple
hopes to acquire as part of the deal -- has been a key concern
for undecided shareholders. [ID:nN02266428]
While Maple did not provide specific valuations, it offered
an illustrative value of the two entities.
Maple Group - initially four leading banks and five top
pension funds - added Desjardins Financial Group, GMP Capital
Inc (GMP.TO), Dundee Capital Markets (DCM.TO) and Manulife
Financial (MFC.TO) to their ranks on Sunday. [ID:nN12291317]
The move further bolsters the home-grown credentials of a
bid that its supporters say would preclude the possibility of
Canadian capital markets falling under foreign control.
Maple's original bank members are the Bank of Nova Scotia
(BNS.TO), Canadian Imperial Bank of Commerce (CM.TO), National
Bank of Canada (NA.TO) and Toronto Dominion Bank (TD.TO).
The five pension funds in the group are 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
(Reporting by Solarina Ho; editing by Sophie Walker)