July 6, 2011 / 5:22 PM / in 7 years

Maple says no need to hike "strong" TMX bid

TORONTO (Reuters) - Maple Group’s takeover bid for Toronto Stock Exchange operator TMX Group (X.TO) is “as strong as you can possibly imagine” and will win over shareholders who spurned a rival offer by the London Stock Exchange (LSE.L), a top Maple official told Reuters.

Luc Bertrand, Maple Group spokesman and vice-chairman of National Bank Financial poses for a photograph in Toronto, July 6, 2011. REUTERS/Mark Blinch

Luc Bertrand, chief representative of Maple, a consortium of Canadian financial institutions, also said his group hopes to complete its acquisition of TMX on friendly terms, but is “fully committed” to getting the deal done.

Maple Group Acquisition Corp became the only bidder for TMX Group last week after the LSE’s friendly offer collapsed because it could not secure the two-thirds of shareholders necessary for it to succeed.

“Now that we’ve gone over the very important step of not having the LSE proposal proceed ... we’re of the view that the 70 percent is, in terms of reaching it, very realistic,” Bertrand told Reuters in his first interview since the LSE bid failed.

Maple, which includes four of Canada’s six biggest banks and five pension funds, needs 70 percent of TMX investors to tender their shares by August 8 for its C$3.8 billion ($3.94 billion) offer to go ahead.

Bertrand, who is also vice-chairman of Maple member National Bank of Canada (NA.TO), indicated that Maple does not believe it needs to raise its bid again to win support.

“This is as strong a bid as you can possibly imagine, so we’re very comfortable with our proposal and we think it’s fair to shareholders,” he said, adding that he thinks the deal can be completed by the fall.

Even if Maple has enough shareholder backing, it still needs to persuade antitrust regulators to accept its plan to integrate the Toronto exchange with its largest competitor, Alpha Group.

Alpha, an alternative trading platform, is already controlled by Canadian banks, and critics say the combination would give Maple too much control over the market.

Bertrand, 56, vehemently disputes the argument.

“I fail to see how what is being proposed in the Maple transaction is in any way, shape or form an increase of influence, power and concentration by a handful of large Canadian banks,” he said.

Bertrand argued the banks, which own the majority of Alpha and stock clearinghouse CDS, another entity Maple hopes to bring into TMX, would see their control in those institutions diminished due to the broadened ownership and board structure.

He said Maple is working with Canada’s Competition Bureau on its submission and has a very strong case.

“By combining all these assets together they will offer Canadian participants much more advanced and sophisticated business solutions,” Bertrand said, adding that Alpha is core to its vision.

Maple hopes to create an integrated trading and clearing exchange for equities, bonds, energy products and derivatives in both exchange-traded and OTC markets.

    Bertrand has already played a major role in the consolidation of the Canadian securities industry.

    The former political analyst and stockbroker spent nearly a decade building the Montreal Exchange into a profitable derivatives bourse of global standing. He then helped broker a deal to combine it with the Toronto Stock Exchange to create TMX Group.

    He was tapped to head TMX Group but was passed over in favor of current CEO Tom Kloet.

    Bertrand, a part-owner of the storied Montreal Canadiens National Hockey League team, reiterated Maple’s confidence in the current TMX management, including Kloet.

    “We’re not walking into this thing and bulldozing the joint. We want to work with the senior management that is currently in place,” he said.

    Bertrand also said the 13-member consortium, which also includes one of North America’s biggest insurers and three independent financial firms, has a “strong desire” to get the remaining two banks — Royal Bank of Canada (RY.TO) and Bank of Montreal (BMO.TO) — on board.

    RBC and BMO were advisors in the LSE-TMX deal.

    ($1=$0.97 Canadian)

    Editing by Jeffrey Hodgson and Peter Galloway

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