TMX details failed merger
TMX, Canada’s leading stock exchange operator, held talks with a third party for nearly a year before they were derailed by regulatory and valuation concerns and before more fruitful talks ramped up with London Stock Exchange (LSE).
According to a management information circular yesterday, which urges shareholders to approve LSE’s takeover proposal, TMX said it held on-again-off-again talks with a third-party from February to November 2010. Talks were formally terminated on 25 January this year.
“TMX Group and the third party were not in agreement with respect to proposed undertakings regarding net benefits to Canada,” the parent of the Toronto Stock Exchange said in a 731-page circular to be mailed to shareholders. Reports suggested that the third party was Nasdaq OMX Group.
TMX Group said the premium offered to its stock price had also eroded over the period of the talks, with no move from the third party to raise its offer.
“In addition, as initial discussions with LSE relating to a merger of equals commenced and progressed, TMX Group considered that such a transaction was superior to an acquisition by the third party and considerably more likely to be achievable.”