Toronto-London bourse merger iffy after rival offer
May 16th, 2011 - 12:37 pm ICT by IANSToronto, May 16 (IANS) The proposed merger of the Toronto Stock Exchange with the London Stock Exchange may be in trouble as a Canadian group has made a rival offer to scuttle foreign takeover of their largest stock market.
The Toronto Stock Exchange, the third largest in North America, and the London Stock Exchange had announced their merger February 9 to create a new global mega-bourse.
With the market value of the London Stock Exchange (LSE) at about $3.87 billion and that of the TMX Group $2.99 billion at that time, the two bourses proposed to form a $7-billion giant entity with offices in Toronto and London.
But the proposal made Canadian banks and the government of Ontario province (whose capital is Toronto) jittery as they feared that the merger could dilute Toronto’s importance as a major market and banking centre in North America.
Their jitters have been calmed with a Canadian group comprising financial institutions, banks and pension funds filing for acquiring the Toronto Stock Exchange - the biggest energy and mining market in the world.
Confirming the rival bid for the exchange, the TMX Group, which operates the Toronto bourse, said at the weekend that “it has received a written proposal for the acquisition of TMX Group by a corporation, formed by a number of Canadian financial institutions, including pension funds and banks, operating under the name Maple Group Acquisition Corporation (Maple).”
But despite the rival offer, the TMX Group said it was working on securing approval from the Canadian government and shareholders to complete its agreed merger with the London Stock Exchange.
The Canadian government, which has been reluctant to give its nod to acquisition of Canadian companies by foreigners in the past couple of years, has yet to approve the merger under the Investment Canada Act.
Ottawa wants to ensure that the takeover of their top bourse by the London Stock Exchange will not negatively impact the country’s financial sector.
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Tags: banking centre, bourses, canadian banks, canadian financial institutions, canadian government, canadian group, foreigners, government of ontario, investment canada act, jitters, london bourse, london stock exchange, merger, nod, ontario province, pension funds, stock market, takeover, tmx, toronto stock exchange