June 3 (Bloomberg) -- TMX Group Inc., the Toronto Stock Exchange owner facing rival takeover offers, was cleared by Canada’s competition authority to pursue its C$3.46 billion ($3.53 billion) combination with London Stock Exchange Group Plc.
Canada’s commissioner of competition issued a “no action letter” in connection with the deal, confirming that she doesn’t intend to challenge the transaction, the Toronto-based company said today in a statement.
The LSE and TMX require more than a dozen approvals from government and regulators for its Feb. 9 agreement to combine, including endorsements from five Canadian provincial bodies including Ontario and Quebec, the federal government and the U.S. Securities and Exchange Commission.
Canada’s federal government gets a say under the Investment Canada Act process, where the country’s industry minister reviews the deal to determine whether it’s a “net benefit” to the country. Industry Minister Christian Paradis has 45 days to review the application, which was submitted by the exchange owners on April 29. The timeframe can be extended 30 days.
LSE’s Feb. 9 agreement would give TMX shareholders 2.9963 shares for each they own, in a deal valued today at C$46.59 a share. LSE investors would own 55 percent of the combined company, to be named LTMX Group Plc, while TMX shareholders would hold the rest. Shareholders of both exchange owners will vote on the agreement at meetings on June 30.
A group of Canadian banks and pension funds is also seeking to buy TMX in a C$48-a-share cash-and-stock offer. TMX has dismissed the proposal by Maple Group Acquisition Corp., saying it’s not superior to the LSE agreement.
The bids for TMX are part of more than $30 billion in takeover offers for exchanges that have been announced globally in less than six months, as bourses try to cut costs and generate more revenue from trading in stocks, options and futures.
--Editors: Nick Baker, Chris Nagi
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