TORONTO A consortium aiming to buy Canada's TMX Group (X.TO) plans to extend the August 8 tender deadline for its C$3.8 billion ($4.04 billion) bid until shareholders can be more confident regulators will approve the deal, a source within the group said on Wednesday.
A takeover of the Toronto Stock Exchange operator under the Maple proposal requires approval by Canada's Competition Bureau as well as regulators in four provinces. Maple plans to integrate TMX's exchanges with the Alpha Group alternative trading system and the CDS trade clearinghouse, raising antitrust concerns.
"We will extend the deadline as many times as we have to until the point where we have sufficient regulatory approvals for shareholders to be able to tender into a bid with certainty of the regulatory process," the source said on condition of anonymity.
The source, who was not authorized to speak on the record, could not say for how long Maple would extend the deadline, but the likely outcome of the regulatory process would become more clear by the end of the Canadian summer.
Maple Group Acquisition Corp, whose members include four of Canada's largest banks, four top pension funds and North America's largest life insurer, has offered C$50 a share for TMX.
The Maple bid started out as an all-Canadian alternative to a friendly takeover offer from the London Stock Exchange (LSE.L), which derailed a month ago when it failed to generate sufficient shareholder support.
Canada's largest bank, the Royal Bank of Canada (RY.TO), and No. 4-ranked Bank of Montreal (BMO.TO) are not a part of the consortium because they were advisers to the LSE and TMX respectively, but the source said they were welcome to join.
He said Maple has held some talks with Royal Bank, but Bank of Montreal still had a conflict as adviser to the TMX.
The Maple bid is a hostile offer, but the TMX board authorized official discussions with the consortium last week, increasing the possibility of the sides coming to an agreement.
"We are exploring with them how we could get the TMX board to support our bid and convert it into a friendly deal," the source said. "The important point here is that Maple is not disappearing."
The sides have already met once this week and expect to meet again before Friday, the source said.
The Competition Bureau is expected to rule on the Maple bid by October at the earliest, and November at the latest.
So far the bureau has asked for supplementary information surrounding the bid and its investors on one occasion, and more such requests are likely as they narrow down concerns.
The bid also needs approval from securities regulators in the provinces of Ontario, Quebec, British Columbia and Alberta, but the first two provinces are viewed as more important because two of TMX's prime assets are located there.
Maple Group officials met with regulators in Quebec, home to the Montreal exchange on Monday and in Ontario, where the Toronto Stock Exchange is located, on Tuesday.
As a part of the reviews, regulators will open the proposal to a public consultation process that is expected to take 45 days.
(Reporting by Pav Jordan; Editing by Frank McGurty)