Maple Group bid for TMX gets nod from Competition Bureau, OSC
TMX Broadcast Centre manager Kris Backus walks in front of the centre's display board in Toronto on May 16, 2011. (Frank Gunn / THE CANADIAN PRESS)
Published Wednesday, July 4, 2012 12:18PM EDT
Last Updated Wednesday, July 4, 2012 4:51PM EDT
TORONTO -- The takeover of the operator of Canada's major stock exchanges cleared a pair of key regulatory hurdles on Wednesday.
The Competition Bureau said it will not challenge the proposed takeover of the TMX Group (TSX:X) by the Maple Group Acquisition Corp.
Meanwhile, the Ontario Securities Commission gave its approval and published final recognition orders for the deal.
Competition Commissioner Melanie Aitken said the bureau had serious concerns with the proposed transaction, but that they had been addressed.
"While the bureau has an independent mandate to review mergers, the bureau provided input and advice to the OSC for its consideration relating to the potential impact on competition that could result from the proposed transactions," Aitken said in a statement.
". . . The measures contained in the OSC's final recognition orders materially change the regulatory environment sufficient to substantially mitigate the bureau's competition concerns."
The proposed takeover still requires approval by the British Columbia and Alberta securities regulators.
The OSC orders set out the terms under which Maple will be permitted to operate a combined exchange and clearing group involving the TMX along with the alternative Alpha system, Canadian Depository for Securities Ltd. and CDS Clearing and Depository Services Inc.
Quebec's securities regulator, the Autorite des marches financiers, previously published final recognition orders with respect to Maple's proposed acquisition of TMX Group and Alpha.
Maple and the TMX Group said they have since been advised that the AMF intends to also soon issue a final recognition order approving Maple's proposed acquisition of CDS.
The recognition orders follow comprehensive reviews that included public hearings and comment periods.
"We are very pleased with the strong progress being made to secure the necessary regulatory approvals," said Maple spokesman Luc Bertrand.
"We hope to receive the remaining approvals shortly and look forward to beginning the work to implement our vision for a more globally competitive exchange in Canada."
Meanwhile, Maple also said Wednesday that Kevin Sullivan, deputy chairman of GMP Capital Inc. (TSX:GMP), will serve as a nominee to the Maple board from the independent investment dealer community.
In order to satisfy a requirement in the final OSC and AMF recognition orders that the Maple board include no more than 50 per cent representation from the original shareholder group, GMP has agreed to withdraw from the consortium.
Maple's offer to acquire a minimum of 70 per cent and a maximum of 80 per cent of the shares of TMX Group for $50 in cash per share is open until on July 31.
The offer is part of an integrated transaction that values the TMX Group at about $3.8 billion.
Assuming the minimum of 70 per cent of the TMX shares are acquired for cash under the offer, former TMX shareholders would ended up owing 41.7 per cent of Maple. If the maximum of 80 per cent are acquired, former TMX shareholders would own 27.8 per cent of the new company.
The investors in Maple are the Alberta Investment Management Corp., Caisse de depot et placement du Quebec, the Canada Pension Plan Investment Board, CIBC World Markets Inc. (TSX:CM), Desjardins Financial Group, Dundee Capital Markets Inc. (TSX:DC.A), Fonds de solidarite des travailleurs du Quebec, National Bank Financial & Co. Inc. (TSX:NA), Ontario Teachers' Pension Plan, Scotia Capital Inc. (TSX:BNS), TD Securities Inc. (TSX:TD) and Manulife Financial (TSX:MFC).