TMX Group Inc. and the London Stock Exchange shareholders are set to vote on the proposed LSE takeover of the TSE on Thursday June 30. Approval of the bid requires a two-thirds vote among the shareholders. It is expected that LSE shareholders will vote to approve, but it is uncertain how TMX shareholders will vote. If the takeover is approved by shareholders, it must then also be approved by Industry Minister Christian Paradis as a ‘net benefit’ for Canada. This week, the Maple Group – a consortium of Canadian banks and pension funds – increased its bid for the TMX, offering $50 a share. The LSE bid is about $44 to $45 a share, though it has also been reported as roughly equal to the Maple Group share price offer. In early June, the Financial Post reported, “Xavier Rolet, the chief executive of the London Stock Exchange Group, says Canada’s free trade negotiations with Europe ‘could suffer’ as a result of the Canadian bank-led counter-proposal to his friendly deal to merge with Toronto Stock exchange owner TMX Group Inc. ‘Brussels does not see some of the recent rhetoric very favourably when you’re negotiating a free trade agreement,’ Mr. Rolet said during a stopover in Toronto to promote his deal. ‘It does look on the other side (of the Atlantic) a bit odd, if I may say,’ he added, noting there is ‘a significant financial services component’ to the long-running free trade talks with the European Union…” In his presentation to an all-party legislative committee in Ontario examining this issue in early-March, Council of Canadians executive director Garry Neil stated, “A further risk to our regulatory capacity comes from the proposed Comprehensive Economic and Trade Agreement (CETA) being negotiated between Canada and the European Union. Even with the secrecy surrounding the talks, it is clear that the EU objectives include to deregulate substantially Canada’s financial sector; to allow more foreign ownership of banks, insurance companies and other strategic assets; and to remove corporate structuring rules which prohibit some companies from offering certain financial products. What’s more worrisome to the Council of Canadians is that our governments, including Ontario’s, appear willing to agree to these EU demands.” Earlier this week, NDP Industry critic Peter Julian said in the House of Commons, “Mr. Speaker, the London Stock Exchange is trying to take over the TMX to gain control of Canadian capital markets. New concerns are being raised throughout the country concerning the takeover of the TMX, including those voiced by the Premier of Quebec and by other provinces. Now more than ever we need a public consultation process. Why is the minister refusing to listen to the Canadian public? Why is he refusing to hold public hearings on this matter? …Mr. Speaker, the Conservatives seem to like secretive closed-door decisions. The NDP welcomes public input. That is the difference. The Prime Minister agreed with us that the Investment Canada Act needs to be substantially changed; public hearings, public conditions, penalties for non-compliance, but so far it has been yet another Conservative failure, hashtag fail, and we are getting a lot of Conservative failures in the first few weeks of this Parliament. Canadians do not want more secrecy. Canadians want public consultations. What does the government have against open and transparent public consultations?” 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 to http://canadians.org/campaignblog/?p=6327 and http://canadians.org/campaignblog/?p=6686.
