Canada's top regulators approve TMX takeover

Wed Jul 4, 2012 6:47pm EDT
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By Euan Rocha and Jennifer Kwan

TORONTO (Reuters) - Canada's top regulators on Wednesday approved the takeover of the country's biggest stock exchange operator by a group of Canadian financial firms, pushing a protracted process tantalizingly close to the finish line.

The Ontario Securities Commission and Canada's Competition Bureau approved the takeover of TMX Group by Maple Group - a consortium of Canada's largest banks, insurers and pension funds - removing two big hurdles to a deal that now needs only the approval of two provincial regulators.

The C$3.8 billion ($3.8 billion) takeover will create a new entity that combines the Toronto Stock Exchange with its biggest rival, Alpha, and with the Canadian Depository for Securities, which clears and settles all stock trades in Canada.

"From what I can see I think it's a fait accompli. The deal is done," said Thomas Caldwell, chairman of Caldwell Financial and a TMX shareholder.

Caldwell believes the combined entity will be in a strong position to diversify into other product lines and grow its reach internationally.

Shares of TMX Group rose as high as C$48.50 shortly after the Competition Bureau released its decision, the highest level since February 4, 2008.

The shares closed up 3.3 percent at C$48.41, slightly shy of Maple's C$50 a share offer price.

"We are very confident that we will be able to honor our July 31 outside date for completing the transaction," said Luc Bertrand, Maple's main spokesman and vice chairman of National Bank Financial.   Continued...