Caisse de Depot et Placement du Quebec Chief Executive Officer Michael Sabia said he’s “quite optimistic” a takeover of TMX Group Inc. (X) by a group of banks and pension funds will be approved by regulators.
“We’ve made a lot of progress,” Sabia told reporters today in Montreal. “I am quite optimistic now that this transaction will be completed.”
The Montreal-based pension fund, Canada’s biggest, is part of Maple Group Acquisition Corp., a group of 13 Canadian financial-services firms proposing to buy the Toronto Stock Exchange owner in a C$3.73 billion ($3.74 billion) deal.
Maple has been seeking approval for a TMX takeover from provincial regulators and Canada’s Competition Bureau, which on Nov. 29 said it had “serious concerns” with the transaction. Maple and TMX have been working to address those concerns.
“I believe a lot of good work has been done and I believe that they are a bit more comfortable,” Sabia said.
Maple will build a “national champion” with the TMX transaction, Sabia said. The Competition Bureau has a choice to make: either allow the creation of a Canadian champion, or run the risk that a foreign buyer tries again to take over the Canadian exchange owner, he said.
London Stock Exchange Group Plc tried to buy TMX in a friendly transaction announced in February last year. Maple followed three months later with an unsolicited bid for TMX on May 13 to challenge the LSE-TMX transaction. TMX and the London exchange scrapped their agreement in June after failing to get enough investor support for the combination, leaving Maple as the sole suitor for the Toronto-based company.
TMX rose 1.2 percent to C$42.50 at 1:01 p.m. on the Toronto Stock Exchange.
‘Right Thing to do’
Sabia said the Competition Bureau ought to approve Maple’s plan because it’s the “right thing to do” for Quebec and Canada.
“I very much hope that the officials in the Competition Bureau will understand the nation-building importance in this and think very hard about what happens if this doesn’t happen because I think they will find they will have created a pretty serious problem,” Sabia said.
Maple has set a Feb. 29 deadline for its offer to buy at least 70 percent of TMX shares, and can extend it until April 30 if regulatory approvals haven’t been received.
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