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Caisse’s Sabia Optimistic TMX-Maple Deal Will Be Approved

Feb. 23 (Bloomberg) -- Caisse de Depot et Placement du Quebec Chief Executive Officer Michael Sabia said he’s “quite optimistic” a takeover of TMX Group Inc. 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.”

Caisse de Depot, which is based in Montreal and is Canada’s biggest pension fund manager, 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. TMX shares rose 1.9 percent to C$42.81 today.

“There are no new developments to report regarding the Bureau’s ongoing review of Maple’s proposed acquisitions at this time,” Alexa Keatinge, a spokeswoman for Canada’s Competition Bureau, said in an e-mailed statement tonight.

Maple has been seeking approval for the TMX takeover from provincial regulators and the 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 of the Competition Bureau.

‘Independent Mandate’

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.

“Under the Competition Act, the Bureau has an independent mandate to review mergers exclusively to determine whether they are likely to result in a substantial lessening or prevention of competition,” Keatinge said in the Bureau statement.

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. 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.

Sabia said the Competition Bureau ought to approve Maple’s plan because it’s the “right thing to do” for Quebec and Canada.

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.

To contact the reporters on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net; Doug Alexander in Toronto at dalexander3@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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