Maple sees progress on TMX takeover approval
By Pav Jordan and Jennifer Kwan
TORONTO (Reuters) - A C$3.8 billion ($3.83 billion) bid to take over the operator of the Toronto Stock Exchange came two steps closer to winning provincial approval on Thursday, driving up shares of TMX Group (X.TO: Quote) even though a competition review could still scupper the deal.
In the province of Quebec, Autorité des marchés financiers said it intends to approve the proposal by Maple Group, a consortium of 13 banks and other financial institutions, despite concerns it would create a near-monopoly in Canadian securities trading.
In a separate statement, Maple said the Ontario Securities Commission is drafting terms and conditions that could allow the OSC to approve the deal. A 30-day public comment period will follow before a final decision by the provincial regulator.
The so-called recognition orders suggest that Maple is closer to resolving any objections that the regulator covering the financial hub of Toronto may have raised since the proposal was unveiled.
"It sounds like they may have some sort of a deal," said Doug Clark, an expert in market structure and managing director of research at Investment Technology Group. "Maple Group and the OSC may have agreed on some sort of terms to get this thing through."
Luc Bertrand, vice-chairman of National Bank Financial, a member of the consortium, said he thought the drafting of the orders by the OSC was significant.
"There's a view that what the Maple proposal is driving towards is philosophically fine," Bertrand said in an interview with Reuters. "That's how I read this.
TMX Chief Executive Tom Kloet said the developments give the deal some momentum. "Having both Quebec and Ontario in a position to approve it is an important step," he said on the sidelines of a futures trading conference in Boca Raton, Florida. Continued...