Maple extends TMX takeover bid to February 29

Tue Jan 31, 2012 2:57pm EST
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By Jennifer Kwan and Euan Rocha

TORONTO (Reuters) - The Canadian group bidding for the country's biggest stock exchange extended its offer for another month on Tuesday and said it has made suggestions to ease regulatory concerns about any lack of competition that would result if its bid succeeds.

Maple Group, comprised of 13 financial institutions, said it has spoken to regulators about several ways it could refine its $3.8 billion ($3.8 billion) bid for TMX Group (X.TO: Quote), operator of the Toronto Stock Exchange and several other markets.

The bid still requires a raft of regulatory approvals and a key area of concern is pricing and governance for the Canadian Depository for Securities (CDS), which clears and settles all stock trades in Canada, and which Maple would take control of under its plan.

CDS currently operates under a cost-recovery model and Maple would change that to a for-profit model.

Another key area is the impact of Maple's proposal to put Alpha Group, TMX's biggest competitor, under its umbrella. Maple is part-owned by some of the same banks that already own Alpha.

The consortium's extension of its deadline to February 29 is its fourth such extension as regulatory oversight continues.

"We are in ongoing discussions with the regulators and have made numerous submissions to them, including recently submitting a proposed CDS pricing model and proposing remedies to address concerns regarding equities trading," Maple's Luc Bertrand said in a statement.

The TMX bid is contingent on it getting regulatory approval to buy both Alpha and the CDS.   Continued...

<p>Luc Bertrand, Maple Group spokesman, poses for a photograph in Toronto, July 6, 2011. REUTERS/Mark Blinch</p>