* Bid deadline on April 30, but no assurances of renewal
* Competition Bureau has provided views to OSC review
process
* OSC draft recognition orders expected soon
* TMX shares soar 6 pct, biggest jump since May 2011
TORONTO, April 27 (Reuters) – A consortium bidding for TMX
Group said on Friday it aims to extend its $3.8 billion
bid for Canada’s biggest stock exchange operator, but it could
not guarantee it would do so as it was still working to resolve
regulatory concerns over the deal.
Shares of TMX jumped after Maple Group, comprised of 13
Canadian financial institutions, said that Canada’s Competition
Bureau and the Ontario Securities Commission were coordinating
their reviews of the proposed takeover.
Critics of the deal worry that it would concentrate too much
power in the hands of a single market and clearing operator
controlled by the country’s dominant financial institutions.
In a statement, Maple signaled that any conditions that the
provincial securities regulator might place on the deal could
ease what the federal Competition Bureau had earlier described
as its serious concerns.
The stock’s 6 percent rise to C$45.43 was its biggest
one-day gain since May 16, 2011, a round the same t ime Maple
offered to buy the operator of the Toronto Stock Exchange for
C$50 a share.
The bid, which has been extended six times already, is due
to expire on April 30.
Maple said the Competition Bureau had provided input to the
OSC even though the two were conducting independent reviews.
The OSC is completing a set of conditions, known as draft
recognition orders, under which it might allow the proposed deal
to proceed.
As part of its proposal, Maple wants to buy the Canadian
Depository for Securities Ltd, or CDS, which clears and settles
all trades in Canada, and fold it into TMX, the operator of most
of the country’s securities exchanges.
That has spurred fears that clearing and settlement of
transactions would favor Maple shareholders, which include
Canada’s top banks, insurers, big pension fund managers and some
broker-dealers.
Another area of concern is that the CDS would turn into a
for-profit model from its current cost-recovery model, which
could open the door to price hikes. To get the deal done, Maple
has said it is ready to give the OSC a role in overseeing
clearing and settlement pricing.
Another sticking point is Maple’s plan to acquire Alpha
Group, TMX’s biggest domestic competitor. Alpha – once a
so-called alternative trading system that now has full status as
an exchange – is owned by some of the members of the Maple
consortium. Such concentration of power must be supervised,
critics say.
The combined TMX-Alpha entity would control some 85 percent
of all stock trades in Canada.
