TORONTO (Reuters) - group TMX, operator of Toronto Stock Exchange, said Friday that its Board of Directors rejected a public offer for the purchase of 3.6 billion ($3.7 billion) of a group of banks and pension funds.
TMX in a statement, said that its Board of Directors still supports a plan put forward in February to join forces with the London Stock Exchange Group, forming a central transatlantic exchange of shares, derivatives and other financial assets.
The consortium, called the Maple group Acquisition Corp., said he is disappointed by the decision of TMX and determine its next course of action in a timely manner.
The Group also said it is confident that its proposed transaction may obtain all required approvals and close the merger by the end of the fall.
Last week, the Canadian consortium proposed to buy TMX and derail friendly offer 3 billion of the stock market in London, who said opponents would allow Canadian to fall under foreign control financial markets.
Battle TMX is part of an intensifying exchange operators drive larger world to achieve the scale now seems to be necessary to compete in an increasingly global commercial environment.
Deutsche Boerse AG the Germany is about to buy, the New York and Paris exchanges after American anti-trust authorities pulled the plug on a rival bid of 11 billion dollars for NYSE Euronext.
The rejection is likely to leave Nasdaq - which had bid for NYSE with IntercontinentalExchange Inc. - scrambling for another target.
The TMX, who is also owner of the TSX exchange for stocks of small-cap and the Montreal Stock Exchange for derivatives, said its Board rejects the Maple offer group because it was inadequate and too risky.
"The opinion of the Council, is that the merger with LSEG continues to be in the best interest of the TMX Group, its shareholders and its stakeholders," TMX Chair Wayne Fox said in a statement.
INSUFFICIENT SUPPLY
The Commission considers that the price proposed by Maple is insufficient, given the agreement would result in a change of control of TMX Group, the company said. Maple would pay about $ 48 C per share in cash and stock for TMX, whose shares closed at C$ 44.06 Friday.
"It's already seen everywhere," said Larry Harris, Professor of finance at the University of California South of Marshall School of Business. Harris was referring to the rejection of the NYSE for Nasdaq and ICE unsolicited submission.
"Shareholders have to be cautious when management proposed an agreement that is potentially interested in management", he said, in reference to the rejection of TMX.
The TMX argues that under the proposal of maple, TMX and its shareholders assume all regulatory risks. Maple submission contains any compensation for the TMX Group if regulatory approvals are not received, the company said.
REGULATORY BARRIERS
The Group of Maple advocates combining national clearing and trading rooms to create value, instead of international expansion.
The Maple consortium members include the Canadian Imperial Bank of Commerce, the National Bank of Canada, Bank of Nova Scotia, Toronto-Dominion Bank and a group of pension funds.
Maple hopes to combine the TMX with alternative trading system group Alpha, which is already owned by the banks of the Canada and clearing clearing and Depository Services Inc. hub.
Such a combination would require the approval of the Bureau of competition of the country. In this review, Maple would have to prove that the effectiveness outweighed competitive concerns.
The LSE TMX deal faces regulatory hurdles as well. The proposal will require a green light from regulators provinces and the Federal Government, which is carefully the agreement under the law of the Canada investment, requiring that foreign takeovers of Canadian companies to be "advantage net" for the country.
The failure of the Nasdaq-ICE for NYSE offer highlights the fragility of deal-making in the trade industry.
(Reporting by Euan Rocha in Toronto, Jonathan Spicer in New York and Abhiram Nandakumar to Bangalore.) (Editing by Frank McGurty, Gary Hill)
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