LSE's TMX bid poses tricky challenge for Canada

Wed Feb 9, 2011 3:41pm EST
 
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By David Ljunggren and Pav Jordan

OTTAWA/TORONTO (Reuters) - A bid by the London Stock Exchange to take over TMX Group, operator of the Toronto Stock Exchange, resurrects the debate on whether Canada is really open for global business, or if regulatory and political hurdles are set to wreck another high-profile deal.

The initial signs are that the proposed merger, which would create the world's fourth-largest trading center with a market value of about $6.9 billion, will not be approved quickly.

The minority Conservative government -- which dented its reputation among foreign investors last year by blocking BHP Billiton's $39 billion takeover bid for fertilizer producer Potash Corp -- has sidestepped the issue for now.

In comments on Wednesday, Industry Minister Tony Clement would not even commit to reviewing the exchange deal, even though he must, under law, examine all foreign takeovers worth more than C$299 million ($302 million) to see if they are of net benefit to Canada.

Asked about possible negative implications of the deal, Clement told reporters: "I am many moons away from being able to answer that question".

Once a review starts, Ottawa has 45 days to make up its mind, but can extend that period for another 30 days.

Clement later told the House of Commons that his officials were already meeting investors and would continue to do so "over the course of the next several days".

Prime Minister Stephen Harper declined to comment on the deal. Last year he was criticized for public remarks about BHP Billiton's bid for Potash Corp.   Continued...