Canada’s TMX undeterred as hostile bid looms

NEW YORK (Reuters) – The head of Canadian market operator TMX Group Inc said Friday that it was full steam ahead for his planned merger with London Stock Exchange Group Plc even though a hostile bid could come “any day now.”

A consortium of banks and pension funds is preparing to take their approximately $3.7 billion offer for TMX straight to its shareholders.

The counteroffer from the Maple Group consortium could disrupt TMX’s planned friendly merger with LSE, which offered to buy the Toronto Stock Exchange parent for about $3.5 billion.

But TMX Chief Executive Tom Kloet said Maple has yet to put forth a “genuine offer,” and sought to boost the credentials of the LSE deal ahead of the June 30 vote of TMX shareholders.

LSE’s planned takeover must pass the Investment Canada Act, which requires foreign takeovers to carry a “net benefit” to Canada.

“We think we’re in quite good shape now,” Kloet told a conference hosted by Sandler O’Neill.

Kloet said the company is “in active dialogue” with the federal government, which must approve the deal LSE and TMX announced in February. “We remain confident that we’re on track for that approval.”

More financial institutions are set to join the Maple bid, which faces antitrust scrutiny and which is running short of time to convince TMX shareholders that its “all-Canadian” option is better for the country’s capital markets.

The group is expected to take its bid directly to shareholders by means of a circular outlining its cash and stock offer.

Responding to what he called mischaracterizations, Kloet said TMX and LSE did not accelerate the shareholder vote date, noting June 14 was the original target. He added the date could be changed if the pair agreed, but that wasn’t his intention.

Shares of TMX were down 10 Canadian cents at C$44.20 in early trading. (Reporting by Jonathan Spicer, editing by Gerald E. McCormick and Lisa Von Ahn)