TMX Group Inc. (X), the Canadian exchange owner facing a C$3.73 billion ($3.8 billion) takeover by a group of Canadian banks and pension funds, rallied after an antitrust regulator said its “serious concerns” on the sale may be mitigated by proposed rules governing the bourse.
Canada’s Competition Bureau said today it “provided views and input” to the Ontario Securities Commission on the potential impact of a TMX takeover by Maple Group Acquisition Corp. Competition Bureau concerns may be eased by rules set by the provincial regulator governing the operation of an exchange.
“It is possible that the OSC’s recognition orders could materially change the regulatory environment such that, if enforced, our serious concerns may be substantially mitigated,” the Competition Bureau said in an e-mail statement. Maple earlier issued a statement on the regulator’s position.
TMX shares rose 4.6 percent to C$44.70 in Toronto for the biggest gain in 11 months.
Maple, whose 13 members include Toronto-Dominion Bank (TD), Manulife Financial Corp (MFC) and Ontario Teachers’ Pension Plan, said there’s “no assurance” that regulatory approvals can be obtained.
Maple has sought to buy TMX since May 13, after the Toronto-based company had already agreed to a friendly combination with the London Stock Exchange Group Plc. The LSE deal fell apart in June after failing to get enough shareholder support.
Talks to Extend
TMX began negotiations a month later and by Oct. 30 reached an agreement that expires April 30. Maple has been in talks to extend the agreement.
Maple also has an April 30 deadline on its tender offer to buy between 70 percent and 80 percent of TMX shares. That offer has been extended six times, as the group awaits approvals. Maple ultimately plans to buy 100 percent of TMX and integrate it with the Canadian Depository for Securities Ltd. clearing house and Alpha Group, a bank-owned company whose Alpha Exchange competes with TMX.
The Competition Bureau said Nov. 29 that it had “serious concerns” about the plan in connection with equities trading and clearing settlement.
Quebec’s financial markets authority said March 15 that it intends to approve the proposed takeover. The Ontario Securities Commission will publish draft terms and conditions for a 30-day public comment period before making a final decision, Maple said.
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