Rolet faces test to tie-up TMX merger
LONDON Stock Exchange chief Xavier Rolet faces a crucial test this week as shareholders in TMX Group, the Toronto bourse operator, vote on their agreed merger.
The battle to tie up the friendly deal is on a knife edge, ahead of the simultaneous poll for LSE and TMX shareholders at 3pm on Thursday.
“I suspect the LSE shareholders will approve the deal on 30 June, but it is a close call which way the TMX shareholders will go,” said James Hamilton, analyst at Numis Securities.
Rolet’s bid for the Canadian exchange group has faced tough opposition from Maple, a 13-strong consortium of the country’s financial firms.
Although the group’s C$3.8bn (£2.4bn) hostile approach appears on paper to trump the LSE’s C$3bn bid, the devil could be in the detail.
Competition concerns are likely to hit the Maple bid, as it would hand the majority of Canada’s banks the control of the country’s exchange network.
But regulators could also take a dim view of the LSE’s bid, which has to pass strict protectionist rules governing foreign ownership of Canadian assets.
The TMX deal is crucial for Rolet, who took over from Clara Furse as LSE CEO two years ago. It is his first serious foray into mergers and acquisitions, an area that makes or breaks many chief executives.
Speaking on Friday, he said: “Maple is unlikely to ever be deliverable, it would saddle TMX with too much debt and it is riddled with conflicts of interests. It is not about patriotism it is about control by a small group of very large traders.”