Quebec icon hits TSX Group's Montreal Exchange deal
By Robert Melnbardis
MONTREAL (Reuters) - The C$1 billion takeover of Montreal Exchange Inc by TSX Group, owner of the Toronto Stock Exchange, got the blessing of key institutional investors at a regulatory hearing on Wednesday, but a former separatist premier of Quebec said the plan should be abandoned.
"It would be better if the transaction did not happen," said Jacques Parizeau, who as premier led the mainly French-speaking province of 7.6 million to near independence from Canada in a 1995 referendum.
Parizeau, 77, was speaking on the first of two days of public hearings on the takeover, which is aimed at strengthening the Toronto exchange, the country's top bourse, in the face of consolidation among global exchanges and new domestic competition in the form of alternative trading systems.
The deal would fold the Montreal Exchange, a specialist in derivatives trading since 1999, into TSX.
The union, already approved by Montreal Exchange shareholders, would create an enlarged company known as TMX Group. It must first past muster with Quebec's securities watchdog, Autorite des marches financier, which is holding this week's hearings, and other regulators.
When unveiled in December after months of intermittent negotiations, the cash-and-stock offer was valued at some C$1.3 billion, but it has eroded in value along with the TSX share price.
Parizeau was a key member of a group of Quebec nationalist politicians and business people who nationalized the province's electricity generation and distribution industry in the 1960s and created its powerful public pension fund manager Caisse de depot et placement to foster the accumulation of capital and economic development in the province.
In his comments on Wednesday, Parizeau indicated he was dismayed that the Caisse, Canada's top pension fund, and Mouvement Desjardins, the province's top credit union organization, are backing the takeover with only a few reservations. Continued...