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LSE Equity Evaporates as TMX Deal Shows Scant Profit: Real M&A

No company’s stock is worth less as currency for takeovers than London Stock Exchange Group Plc, according to traders who profit from mergers and acquisitions.

The value of the bourse’s offer to buy TMX Group Inc. with equity fell 4.9 percent below the price of the Toronto stock exchange operator’s shares yesterday, according to data compiled by Bloomberg. The gap is the widest of any all-stock deal over $1 billion, indicating to arbitragers that LSE’s equity alone won’t be enough to fend off a higher bid from a group of Canadian banks and funds trying to keep TMX in local hands.