New players in hostile bid for TMX

Four new players have joined the rival, hostile bid for TMX Group Inc. , seeking to bust up its proposed marriage to London Stock Exchange Group PLC.

Among the new players are Manulife Financial Corp. , GMP Capital Inc. , Desjardins Financial Group and Dundee Capital Markets . They join several Canadian banks and pension funds already seeking control of the operator of the Toronto Stock Exchange.

The group, which calls itself Maple Group Acquisition Corp., decided to hold talks with potential members to combat criticism that the banks would once again have too much control over the stock exchange if Maple's bid succeeded. The group already included four of Canada's big banks, as well as five of the country's major pension funds.

Luc Bertrand, a senior official at National Bank of Canada and the public face of the Maple Group, said in a statement that “the participation of Desjardins, Dundee, GMP and Manulife is another clear indication that our offer for TMX Group is superior to the LSE takeover plan, and that our vision for an integrated exchange provides a better way forward for Canada’s capital markets.”

The consortium is up against the London Stock Exchange, whose earlier bid is favoured by the TMX Group.

With the new members, if Maple's bid succeeds, TMX Group's existing shareholders would own about 40 per cent of the outstanding shares, pension funds would hold about 31 per cent, banks about 22 per cent, and the new members that are now being brought in roughly 7 per cent.

By including a major credit union, insurer, and independent securities firms, Maple hopes to demonstrate to regulators and the Canadian public that its bid, which values TMX Group at $3.6-billion, has broad-based support among the financial community.

The consortium already consisted of Alberta Investment Management Corp., the Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, Canadian Imperial Bank of Commerce, National Bank, Ontario Teachers Pension Plan, Bank of Nova Scotia, and Toronto-Dominion Bank.

The bid was originally conceived by TD, National and CIBC.

Executives at the four companies that have now chosen to join Maple said they did so because they want the exchange to remain in Canadian hands and because it's a solid investment opportunity.

"Maple's bid is an opportunity to preserve and enhance a uniquely Canadian success story," said Harris Fricker, chief executive officer of GMP Capital.

"We believe first of all that this is an excellent investment for Manulife that makes sense for our shareholders and our business," added Don Guloien, Manulife's CEO. "At the same time, we hope that with Maple's support, the TMX Group can do an excellent job of serving Canada's capital markets - and grow internationally.”