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NEWS: TMX and LSE shareholders to vote on stock market takeover, June 30

CBC reports, “A consortium of Canadian pension funds and banks (including CIBC World Markets, TD Securities, the Canada Pension Plan Investment Board, and the Ontario Teachers Pension Plan Board) is taking its hostile $3.6 billion bid directly to TMX Group shareholders after the stock exchange operator accelerated a shareholder vote on its favoured plan to merge with the London Stock Exchange. …Earlier Wednesday, the TMX said it would accelerate a shareholder vote on its proposed $3 billion US merger with the London Stock Exchange. Shareholders at both exchange companies are set to vote on their merger June 30.”

“The Maple Group Acquisition Corp. (will) mail shareholders its $48 per share proposal… The Maple group’s bid must be accepted by 66 per cent of shareholders. The Maple group bid, announced earlier this month, is meant to keep TMX in Canadian ownership after many bank and government officials raised concerns about the so-called ‘merger of equals’ with the LSE, which is technically a takeover by the British operator.”

“The outcome of the battle between rival bidders for the TMX Group will determine the future of the Canadian capital markets company, which runs the Toronto Stock Exchange, the Montreal derivatives market and the junior TSX Venture Exchange.”

CBC adds, “The deal (between the TMX and the LSE) is (still) subject to approval from various Canadian regulators, including a review from Industry Canada under the Investment Canada Act, which must determine if the merger is ‘of net benefit’ to Canada.”

The Wall Street Journal recently reported, “Christian Paradis, Prime Minister Stephen Harper’s senior minister from Quebec, will succeed (Tony Clement as Industry Minister). Mr. Paradis will be under pressure to liberalize Canada’s foreign-ownership rules as they pertain to certain key sectors, among them telecommunications—something Conservatives promised and failed to do in 2010. He may also decide the fate of Canada’s flagship Toronto Stock Exchange, as its owner, TMX Group Ltd., is the target of a takeover battle between the country’s banks and pension funds, and London Stock Exchange Group PLC.”

Yesterday, CTV reported, “According to an internal British government briefing document obtained by The Globe and Mail, James Sassoon, Commercial Secretary to the Treasury, asked for assurances that Ontario would not block the proposed merger (between the TMX and LSE) if Investment Canada approves it. ‘I said our government would not strictly kill a deal with the LSE on purely political grounds, that there are regulatory hurdles,’ (Ontario finance minister Dwight) Duncan said in a telephone interview from London… There is some question as to whether Ontario has the power to block the deal on its own. Nevertheless, Mr. Duncan’s vocal reservations about whether it makes sense for Canada’s premier stock exchange to join forces with an overseas partner have made stock exchange officials nervous. The U.K. government strongly supports the LSE bid, according to a source close to the situation.”

CTV also notes, “During the meeting and in a luncheon speech on Tuesday to the Canada-U.K. Chamber of Commerce, Mr. Duncan said he made no secret of the fact that he welcomes the so-called Maple bid launched by the banks. He said he was taken aback by the level of interest among British investors in the LSE/TMX merger proposal. He (also) told his audience that the Maple bid faces its own regulatory hurdles because it would lead to the bank-led group controlling more than 80 per cent of share trading in Canada and may be deemed anti-competitive.”

For extensive media coverage on comments by Council of Canadians chairperson Maude Barlow and executive director Garry Neil against the LSE takeover of the TMX, please go tohttp://canadians.org/campaignblog/?p=6327 and http://canadians.org/campaignblog/?p=6686.