Toronto, London bourse merger termed ‘lob-sided’
April 21st, 2011 - 3:51 pm ICT by IANSToronto, April 21 (IANS) As uncertainty persists over the proposed merger of the Toronto Stock Exchange with the London Stock Exchange, a committee of provincial lawmakers here has called it a ‘lob-sided affair.’
The committee looked at the impact of the proposed merger on Toronto as Canada business and market capital. The Toronto Stock Exchange, the third largest in North America, and the London Stock Exchange announced February 9 to merge to create a new global mega-bourse.
Since the current market value of the London Stock Exchange (LSE) is about $3.87 billion and that of the TMX Group $2.99 billion, the two bourses will form a nearly $7-billion giant entity with offices in Toronto and London.
After its review of the merger proposal, the legislative committee has sought an equal number of board directors from both sides, the commitment that Toronto Stock Exchange operations and staff stay in Canada and that Canadian companies continue to have access to capital, according to a report here.
Only seven Canadian directors as against eight from Britain have been mooted on the proposed merger.
Gerry Phillips, cabinet minister in the Ontario government, has said that the house committee “had some significant concerns…it was presented as a merger of equals. I think the committee wasn’t convinced of that.”
A review of the merger deal by the Canadian government is also pending as Ottawa wants to ensure that it will not negatively impact the country’s financial sector or dilute Toronto’s importance as a major market and banking centre in North America.
Even top banks and mining companies are also divided over the deal.
But a majority of chief executives here favour the deal.
In a poll commissioned by the TMX Group, which operates the Toronto Stock Exchange, most CEOs have said the government should give the nod to the merger.
The 150-year-old Toronto Stock Exchange is the biggest resource (energy and mining) leader, with about 1,500 companies listed on it.
According to the Globe and Mail newspaper, the proposed merger “has rekindled debate over shielding Canadian companies from foreign takeovers and has protectionists squared off against free-market proponents.”
(Gurmukh Singh can be contacted at gurmukh.s@ians.in)
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Tags: banking centre, board directors, cabinet minister, canada business, canadian directors, chief executives, current market value, gerry phillips, legislative committee, london bourse, london stock exchange, merger deal, merger of equals, merger proposal, mining companies, ontario government, resource energy, stock exchange operations, tmx, toronto stock exchange