August 7, 2022

DealBook: Maple Makes Hostile Bid for Toronto Exchange Owner

The Maple Group on Monday moved forward in its hostile play for TMX Group with a $3.8 billion bid, besting a $3.6 billion offer by the London Stock Exchange.

Maple, a consortium of financial firms, is trying to challenge a deal with the London exchange that has already been approved by TMX. The group, which includes big Canadian banks and pension funds, is mobilizing to keep the Toronto exchange in national hands.

“We believe our offer represents superior value, greater certainty and a better outcome for Canada’s capital markets,” said Luc Bertrand, chief executive of Maple, predicting that the rival deal “would see TMX Group diluted to the status of junior partner within a larger organization based in, and managed and governed from, London.”

The consortium is seeking to buy the TMX Group, with a combination of cash and stock. Maple says its bid represents a 24 percent premium over the London exchange’s proposal. But the deal is based in part on the valuation of Maple’s shares, a newly formed company that may vary in worth.

The group of firms has adjusted its initial proposal. The cash portion of the deal now accounts for 70 percent of the purchase price, up from 60 percent. Shareholders would also receive 40 percent of Maple’s shares, versus 30 percent. Maple is also promising to maintain an annual dividend of 1.60 Canadian dollars per share.

Maple is taking its offer directly to TMX investors. They will have the opportunity to vote on the matter at the upcoming shareholders’ meeting on June 30. If they reject the deal with the London exchange at that point, investors will have until August 8 to accept Maple’s offer.

The London Stock Exchange had no immediate comment.

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