TMX Group Inc. (X) rose to its highest level since June after Quebec’s financial markets authority said it plans to approve the proposed C$3.73 billion ($3.76 billion) takeover of the exchange operator by Maple Group Acquisition Inc., a group of pension funds and banks.
“We’re satisfied with the results of discussions to date with Maple and with the scope of the undertakings that Maple will be required to provide,” Mario Albert, chief executive officer of Autorité des Marchés Financiers, said today in a statement.
TMX, which owns the Toronto Stock Exchange, the Montreal Exchange and the TSX Venture Exchange, rose 3.1 percent to C$45.09 in Toronto, its highest close since June 24. Earlier, the stock advanced as much as 4.6 percent, its biggest intraday gain since Aug. 11.
Maple said today it was in discussions to extend its offer for Toronto-based TMX beyond the planned April 30 completion date as it pursues regulatory approval from provincial authorities and Canada’s Competition Bureau.
Maple’s 13 members include Toronto-Dominion Bank (TD), Ontario Teachers’ Pension Plan, Manulife Financial Corp. (MFC) and Caisse de Depot et Placement du Quebec, the country’s largest pension-fund manager.
Plans for Integration
The Ontario Securities Commission, Canada’s main stock market regulator, “has requested that its staff develop draft recognition orders with detailed terms and conditions,” Maple said in today’s statement. The OSC will publish the draft orders for a 30-day public comment period before making a final decision, Maple said.
“This is normal course in a regulatory process,” Luc Bertrand, a vice chairman at National Bank of Canada (NA) who acts as spokesman for Maple, said in a telephone interview. “The OSC conducted a thorough analysis. If they are satisfied with the framework of the transaction, the next step would be to get the drafting of recognition orders.”
Canada’s Competition Bureau reiterated today it has “serious concerns” about the plan in connection with equities trading and clearing settlement. The Competition Bureau has no new developments to report on its review, spokeswoman Alexa Keating said in an e-mail.
Maple intends to buy 100 percent of TMX and integrate it with clearing house Canadian Depository for Securities Ltd., and Alpha Group, a bank-owned alternative trading venue that competes with TMX.
Conditions To Address Issues
Montreal-based Autorité said the conditions it intends to impose on Maple and its subsidiaries will adequately address issues that have been raised by the proposed transaction, including corporate governance, market access, fees, the framework for Maple’s proposed operations and the continuity of derivatives operations in Québec.
The conditions will be incorporated into the decisions that the Quebec regulator plans to issue in the coming weeks.
Maple first proposed to buy the Toronto Stock Exchange owner in May.
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