LSE under fresh pressure to complete TMX merger

THE LONDON Stock Exchange’s friendly merger with Toronto bourse operator TMX was put under renewed pressure yesterday, after the Maple group of Canadian banks and pension funds increased its hostile offer.

Shareholders in TMX now face a tough choice, to be settled in a vote next week, over which deal to accept.

Maple has increased its bid to C$50 per share from C$48 per unit and increased the number of shares it wants to 80 per cent from 70 per cent, giving its approach a total value of C$3.8bn (£2.44bn).

Just one day earlier, the LSE and TMX announced a special dividend in an attempt to sweeten the deal for shareholders. They are offering an 84.1p payment for LSE shareholders and a C$4 special dividend for TMX shareholders, totaling £415m, should the deal be completed.

Influential proxy advisory firm Institutional Shareholders Services yesterday came out in favour of the friendly merger, despite the improved Maple bid.

Former TMX director and founder of Canadian research house Forefactor, Renee Colyer, said: “The agreed merger should happen to facilitate growth. It will put TMX in the globalisation game, whereas the Maple offer pretty much keeps us where we stand.”

TIME LINE | THE BATTLE FOR TMX

9 February 2011: The London Stock Exchange and TMX announce an agreed £4.3bn all-share merger; it is billed as a friendly merger of equals. The LSE’s share of the deal is valued at C$3.2bn (£2bn).

14 May 2011: Maple Acquisition Group, a consortium of nine Canadian banks and pension funds, makes its first approach to the board of TMX Group. Its deal is valued at C$3.6bn. TMX says it will consider the offer, although later turns it down.

26 May 2011: Maple goes hostile in its bid to take control of TMX.
12 June 2011: Four more Canadian financial institutions join the Maple bid.

12 June 2011: Maple tweaks its bid, slightly improving its offer. It writes to TMX shareholders calling on them to vote against the LSE merger on 30 June.

22 June 2011: LSE and TMX offer shareholders a special dividend to sweeten their planned merger.

23 June 2011: Maple immediately hits back with another improved offer of C$3.8bn.