March 18, 2014 / 5:43 PM / 4 years ago

UPDATE 1-Toronto stock exchange chief to retire in August

By Alastair Sharp and Solarina Ho

TORONTO, March 18 (Reuters) - TMX Group Ltd Chief Executive Thomas Kloet is set to retire at the end of August after six years as head of the company that operates the Toronto Stock Exchange, a period that included its acquisition by a consortium of some of Canada’s biggest banks and pension funds.

Kloet, a 30-year veteran of the exchange industry, will step down Aug. 31, the company said late on Monday.

Analysts said they did not expect Kloet’s successor to embark on a major strategic shift. They said the new chief executive could come from within the company, from one of the banks or pension funds in its ownership consortium, which is known as Maple Group, or from completely outside TMX circles.

“I don’t think the Maple Group would be hell-bent on drastic change in leadership or strategic direction for the company,” said Shubha Khan, an analyst at National Bank Financial.

“I think that whoever succeeds Tom Kloet, be it internally or externally, will follow the path Tom Kloet had embarked on from the outset,” he said.

Kloet became chief executive of TMX in 2008 and led the company through a significant expansion, including opening offices in New York, London, Sydney and Beijing.

TMX spokeswoman Carolyn Quick said Kloet intended to remain hands-on until his last day and then planned to spend more time at his new home in South Carolina and expand his work as a board member at other companies.

While the TMX’s fortunes have improved since the financial crisis, it has struggled more than many stock markets around the world due to its reliance on new issues and capital-raising by the cyclical energy and mining sectors.

“Tom managed the business through a very challenging period, and TMX and the industry continue to face a lot of challenges, particularly in Canada because of the capital markets’ dependence on the resource sector,” CIBC World Markets analyst Paul Holden said.

In early 2011, TMX agreed to a multibillion-dollar friendly takeover by the London Stock Exchange Group, a deal later thwarted by a hostile rival bid from Maple Group.

LSE and TMX, whose attempted tie-up came during a period of consolidation attempts by the world’s top exchanges, scrapped their deal when it failed to win over shareholders.

Kloet eventually accepted the Maple consortium’s C$3.8 billion ($3.4 billion) takeover offer and became CEO of the new company in 2012. He guided its integration with the Canadian Depository for Securities Ltd and Alpha Exchange Inc, which were owned by members of the consortium.

Before that deal, Kloet led the integration of the Montreal Exchange into TMX. TMX had acquired the Montreal market in late 2007.

Before joining TMX, Kloet was the first CEO of Singapore Exchange Ltd. He also had been a director of the Chicago Mercantile Exchange. He is currently chairman of the Boston Options Exchange.

TMX shares were up 0.4 percent at C$51.75 early on Tuesday afternoon.

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