TMX jumps as Maple says it hopes to extend bid

Fri Apr 27, 2012 4:59pm EDT
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By Euan Rocha and Jennifer Kwan

TORONTO (Reuters) - A consortium bidding for TMX Group (X.TO: Quote), the operator of Canada's biggest stock exchange, said on Friday it hopes to extend its $3.8 billion offer but is still working to resolve regulatory concerns.

TMX shares rose 6 percent as investors interpreted the statement from Maple Group, comprised of 13 Canadian financial institutions, as a cautiously optimistic sign that the long-delayed deal might succeed.

Maple said Canada's Competition Bureau and the Ontario Securities Commission were coordinating their reviews of the proposed takeover. Maple has said it is working with regulators on smoothing out any sticking points.

Maple signaled that any conditions the provincial regulator might place on the deal could ease what the federal competition authorities had earlier described as serious concerns.

That said, the consortium said it still could not guarantee it would extend its bid, which is due to expire on Monday. Maple has already extended it six times.

Critics worry that the deal would concentrate too much power in the hands of a single market and clearing operator controlled by Canada's dominant financial institutions.

The stock's 6 percent rise to C$45.43 was its biggest one-day gain since May 16, 2011, around the time Maple offered to buy the Toronto Stock Exchange operator for C$50 a share.

"The market is taking this thing as if the deal is more likely to occur than not. A lot of people are looking for signals right now," said Nick Thadaney, chief executive of the Canadian arm of research broker ITG. "But this press release should not be seen as it being signed, sealed and delivered."   Continued...