Reuters: Mergers News: UPDATE 2-Maple extends C$3.8 bln bid for Canada's TMX Group

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UPDATE 2-Maple extends C$3.8 bln bid for Canada's TMX Group May 31st 2012, 16:15 Thu May 31, 2012 12:15pm EDT * Bid offer deadline extended to July 31 * Maple says regulatory oversight "ironclad" * Securities watchdogs, Competition Bureau reviewing deal By Jennifer Kwan TORONTO, May 31 (Reuters) - The Canadian consortium of f inancial institutions bidding for the operator of the Toronto Stock Exchange extended its of fer on Thursday, and said it is convinced the deal has deep support among the country's financial and investing community. Maple Group, which prolonged its C$3.8 billion ($3.67 billion) b id to buy TMX Group Inc for the eighth time, said the extension will allow for the necessary regulatory approvals needed for an ambitious plan that would transform Canada's stock trading landscape. That regulatory oversight will provide "ironclad protection" for the investing public and dealers outside the Maple Group, Luc Bertrand, Maple's key spokesman and vice chairman of National Bank Financial, said in a speech. Critics of the deal are worried that it would concentrate too much power in the hands of a single player, creating a near monopoly of stock market trading and clearing operations. "The Maple transaction will not create a so-called 'regulated monopoly,'" Bertrand said in prepared remarks for a speech to a Toronto business group. Equities trading in Canada will remain "vigorously competitive," with the likes of alternative trading venues such as Chi-X, Pure Trading, Omega and other U.S-based alternative trading systems, as well as major U.S. exchanges, he added. Maple, which comprises most of Canada's biggest banks as well as pension funds, the country's largest insurer and other financial groups, wants to combine TMX with bank-owned Alpha Group, Canada's second-biggest stock trading venue. It also wants to wrap in the Canadian Depository for Securities Ltd, the clearing system for securities trades. Bertrand said recent draft rules issued by the Ontario Securities Commission, Canada's most powerful securities regulator, would protect competition in equities trading and ensures the cost of trading does not skyrocket. The rules are out for 30-day public comment period that closes on June 4. Bertrand said they will provide strict oversight over ownership and board membership to ensure independence, and provisions for fair and reasonable fees for clearing services. Regulators in Ontario, Quebec, Alberta and British Columbia are reviewing the deal. The federal Competition Bureau, an independent law-enforcement agency, is also scrutinizing the proposed bid. TMX shares were down 8 Canadian cents at C$45.84 at midday on the Toronto Stock Exchange, well below Maple's C$50 a share offer. Link this Share this Digg this Email Reprints

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