Four Canada banks will oppose TMX-LSE deal: sources

Wed Mar 9, 2011 11:17am EST
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By Pav Jordan

TORONTO (Reuters) - Canadian banks will declare their opposition to a proposed $3.1 billion takeover of the TMX Group by the London Stock Exchange, sources said, raising a formidable new obstacle to regulatory approval of the deal.

Four of the country's six top banks have penned a letter outlining their concern that the deal would hurt Toronto's ambitions to become a global financial services hub, two bank sources told Reuters on Wednesday. They spoke on the condition of anonymity because they were not authorized to discuss the matter.

The TMX operates the Toronto Stock Exchange and the TSX Venture Exchange for small-capitalization companies.

""Toronto's hopes to be a global financial services hub could suffer a severe and potentially irreversible setback," a draft of the banks' letter states, according to a report in the Globe and Mail newspaper.

Opposition within Canada's powerful banking industry comes on top of the sharp criticism voiced by provincial lawmakers since the deal was announced last month.

The four banks that will sign the letter - Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and National Bank of Canada - have no interest in the deal.

The other two - Royal Bank of Canada and Bank of Montreal - are advising the LSE and the TMX, respectively.

National Bank, Scotia Bank and CIBC did not immediately respond to requests for comment and TD and declined to comment.   Continued...