Quebec supports the bid for TMX Group Inc. (X) from Canada’s Maple Group Acquisition Corp. over the takeover by London Stock Exchange Group Plc (LSE) because the local offer gives more guarantees on preserving jobs in Montreal, Premier Jean Charest said.
“We would much prefer to see ownership in the hands of the Maple Group, if only because we would much rather see Canadian ownership of our stock exchange,” Charest said today in an interview at Bloomberg’s headquarters in New York. “What we are first of all interested in is making sure that Montreal is able to preserve that niche or expertise.”
Charest’s view is important because regulators in Quebec and Ontario must approve the sale of the Toronto Stock Exchange owner. The Maple bid has the backing of Quebec-based financial groups including National Bank of Canada (NA) and the Caisse de Depot et Placement du Quebec, the country’s biggest pension fund.
Ontario Finance Minister Dwight Duncan also criticized LSE’s C$3.42 billion ($3.53 billion) bid for TMX, saying he prefers to keep the exchange in Canadian hands. Both provincial governments can provide input on their concerns during regulatory hearings scheduled next month in Quebec and Ontario.
TMX, owner of the Toronto Stock Exchange and Montreal’s derivatives market, backs LSE’s all-stock takeover worth about C$46.05 a share. The company has rejected a C$3.58 billion cash- and-stock bid from Maple Group, whose 13 backers include Toronto-Dominion Bank (TD) and Canadian Imperial Bank of Commerce.
TMX fell 67 cents, or 1.5 percent, to C$43.52 at 2:55 p.m. trading on the Toronto Stock Exchange
Maple Group approached TMX on May 13 with a plan to buy the Canadian bourse. TMX rejected the offer May 20, saying it wasn’t better than its agreement with LSE, prompting Maple Group to take its offer directly to TMX investors.
The LSE-TMX bid needs approval from Industry Minister Christian Paradis, who is reviewing the transaction to determine if the deal provides a “net benefit” to the country under the Investment Canada Act.
TMX, formerly known as TSX Group Inc., agreed to give Quebec’s financial markets regulator, Autorité des Marchés Financiers, veto power over any sale when it bought Montreal Exchange Inc. in 2008.
Charest said today he met with LSE Chief Executive Officer Xavier Rolet after the London-based company announced its proposed deal with TMX. He said while he felt at the time LSE was sincere about maintaining jobs in Montreal, he is concerned that the company will change plans.
“They’ve been fairly positive, as firm as they could be in regards to the derivatives operations in Montreal,” Charest said. “We didn’t sense that there was a hesitation about it. But things change.”
Canadian ownership of TMX would also likely safeguard jobs for lawyers and accountants in Montreal and Toronto, he said.
“It has a lot of repercussions in regards to the economy in Canada in terms of everything that’s around the stock exchange,” he said. “It’s a pretty key component of our economy.”
Rolet and TMX CEO Thomas Kloet are scheduled to speak to the Board of Trade of Metropolitan Montreal tomorrow in an attempt to win support from Quebec business people. Former Montreal Exchange CEO Luc Bertrand, who has been acting as the main spokesman for the Maple bid, is slated to speak to the same audience June 20.
To contact the editor responsible for this story: David Scanlan at email@example.com