* TMX says makes no recommendation on Maple offer
* Both sides say no assurance of deal
* Talks come after London Stock Exchange bid abandoned
(Recasts lead, adds analyst comment)
By Pav Jordan
TORONTO, July 21 TMX Group (X.TO) will enter
talks with a Canadian consortium offering C$3.8 billion ($4.02
billion) to take over the operator of the Toronto Stock
Exchange, opening the door for a friendly deal.
TMX authorized the discussions with Maple Group Acquisition
Corp about a month after the London Stock Exchange (LSE.L)
abandoned a friendly bid that failed to generate enough
TMX said it was making no recommendation to shareholders on
Maple's hostile bid. To succeed, the bid needs 70 percent of
TMX shares to be tendered by Aug. 8.
The decision to proceed with talks "makes it more likely
that Maple and TMX come to an agreement before the August 8
tender deadline," said Ed Ditmire, analyst with Macquarie
Capital in New York.
"If Maple and the TMX board were to find common ground,
they would be able to propose a friendly merger and there would
be no need for a tender."
Maple, comprised of 13 Canadian financial institutions,
wants to strike a friendly deal with TMX and believes its
offer, valued at C$50 a share in cash and stock, is
TMX stock closed at C$43.90 a share earlier on Thursday,
before the talks were announced.
"While there can be no assurance that these discussions
will ultimately lead to a TMX Group Board supported
transaction, the signing of this agreement and the commencement
of discussions is a positive step," said Luc Bertrand, speaking
on behalf of Maple Group. Bertrand is vice-chairman of National
Bank of Canada (NA.TO), one of the Maple members.
The bid also faces a review of Canada's Competition Bureau
that could force changes. The deal has raised concerns that it
might narrow choices for trading Canadian stocks because it
would eliminate the country's largest alternative trading
($1=94.4 Canadian cents)
(Additional reporting by Solarina Ho; Editing by Frank