Rival TMX bid could poach LSE’s advisers

ROYAL Bank of Canada, one of the London Stock Exchange’s advisers for its agreed merger with Toronto bourse operator TMX, could be poached by the rival bidder threatening to derail the LSE’s plans.

Luc Bertrand, the chief of the Maple consortium of banks mounting a rival offer, said he would approach Royal Bank of Canada. “For obvious reasons we haven’t spoken to [RBC]… I imagine in due course we will,” he said.

He said he would also approach Bank of Montreal, which is advising TMX.

Any bid for the Toronto Stock Exchange operator involving the advisers to the London Stock Exchange deal would be an embarrassing development for the architects of the agreed tie-in.

Meanwhile, Canadian regulators are facing tough choices over the future of the Toronto Metals Exchange.

Unlike the LSE, the Maple bid would not face protectionist rules that have blocked foreign bids for Canadian firms, such as BHP Billiton’s pursuit of Potash Corp last year. But analysts yesterday warned that the group could fail competition laws.

“[It] might create issues around monopolistic and anti-competitive structures, in that the combined entity would control the vast majority of exchange transactions in Canada and pricing power would be firmly entrenched,” said Darryl Levitt, a mergers and acquisitions expert at Macleod Dixon.

MEET THE ADVISERS

JOHN TUER

SCOTIABANK

EACH bank involved in the Maple bid for TMX has a team of M&A bankers working on its proposed takeover.

John Tuer is leading the advisory for Scotiabank, the second largest bank involved in the bid.

Bill Quinn is the lead adviser from TD Securities, the largest Canadian bank on the bid.

Paul Spafford and Frank Ord are advising from CIBC, whilst Craig McDougall is on the deal from National Bank of Canada.