The brief announcement was not unexpected. Three large banks and several institutional investors have been critical of a proposed merger between the TMX Group, parent of the Toronto bourse, and the London Stock Exchange since it was announced in February.
TMX’s statement did not name the banks or the institutional investors. It said that their offer consisted of cash and equity and would provide an unspecified premium over the exchange’s current share price. According to TMX, the deal would also hinge on regulators approving a merger between the Toronto Exchange and the Alpha Trading Systems, an alternative trading system owned by several Canadian banks.
The acquisition group, according to TMX, also plans to merge CDS, a clearing system controlled by the banks, into the Toronto Exchange.
While TMX said it will review the offer, it added that it “will continue to pursue efforts currently underway to secure the necessary regulatory and shareholder approvals required to complete its agreed merger with London Stock Exchange Group.”
In March, the Toronto-Dominion Bank, the Canadian Imperial Bank of Commerce and the National Bank of Canada published an open letter condemning the proposed merger. While the two exchanges have described it as a merger of equals, many Canadians fear that it would be effectively a takeover by London. As well, there are fears that small Canadian companies could find it difficult to access capital through a merged exchange spanning two continents.
“Canadians should have the confidence to go global with institutions firmly anchored in our country — anchored in ownership, anchored in head offices, but most importantly anchored in mission,” the banks said in their letter.
None of the banks responded to questions about whether they were involved in the bid for the exchange on Saturday.
There has been speculation in the news media that the Ontario Teachers’ Pension Plan and the Canada Pension Plan Investment Board would back a hostile bid for TMX.
A spokeswoman for the Canada Pension Plan Investment Board declined to comment. The Teachers’ Pension Plan did not respond to a request for comment.
Article source: http://www.nytimes.com/2011/05/15/business/global/15exchange.html?partner=rss&emc=rss