By Pav Jordan
TORONTO, May 14 (Reuters) - Canada's TMX Group, operator of the Toronto Stock Exchange, has received a takeover proposal from a group of Canadian banks and pension funds that rivals a friendly $3 billion bid from the London Stock Exchange .
TMX, in a statement on Saturday, did not say how much the financial institutions -- known as Maple Group Acquisition Corp -- were prepared to pay, only that the proposal was above the current market price for TMX shares.
TMX Group stock closed at C$41.75 on Friday, valuing the company at about C$3.11 billion ($3.2 billion), higher than the LSE offer.
'The Maple proposal, which is not binding and was prepared for discussion purposes, provides for a combination of cash and equity consideration stated to be at a premium to the current market price of TMX Group shares,' TMX said.
The group, whose name invokes Canada's most patriotic symbol, the maple leaf, could represent a more palatable alternative to the LSE proposal for Canadian critics concerned about control of a national institution falling into foreign hands. A TMX-LSE combination could hinder the ability of Canadian resource companies to raise capital and diminish Toronto's importance as a financial center, opponents say.
In addition to the Toronto Stock Exchange, TMX owns the TSX Venture Exchange for small-cap stocks and the Montreal Exchange for derivatives trading.
The LSE confirmed on Saturday it had been notified by the TMX of the rival approach from Maple Group, but said it remained committed to its merger with TMX.
The LSE launched its friendly bid for the TMX, one of the largest concentrations of mining stocks in the world, on Feb. 9, sparking outcry from some of the country's largest banks.
Toronto Dominion Bank and National Bank of Canada were the most vocally opposed, while officials from Canadian Imperial Bank of Commerce and Bank of Nova Scotia suggested they would be OK with the transaction, but in a slightly different form.
The LSE has also met with opposition from some Canadian politicians and companies.
The exchange operator said on Saturday the Maple Group was made up of a number of Canadian financial institutions, including pension funds and banks, but it did not identify them by name. A TMX spokesman was not immediately available for comment.
The announcement follows reports in the local media that three of Canada's biggest banks and a number of its major pension fund managers were considering ways to block the LSE's bid, including a rival offer.
The media reports said a counterbid for TMX might come through Alpha Group, an alternative trading system founded by Canada's biggest banks and the Canadian Pension Plan Investment Board.
But two of Alpha's shareholders, Bank of Montreal and Royal Bank of Canada, are advisers in the LSE-TMX deal and support it.
The TMX said on Saturday it would continue to pursue efforts to secure regulatory and shareholder approvals required to complete its agreed merger with London Stock Exchange Group.
(Reporting by Pav Jordan; Editing by Frank McGurty and Peter Cooney) Keywords: TMX/CANADA (pav.jordan@thomsonreuters.com; +1 416 941 8163) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
TORONTO, May 14 (Reuters) - Canada's TMX Group, operator of the Toronto Stock Exchange, has received a takeover proposal from a group of Canadian banks and pension funds that rivals a friendly $3 billion bid from the London Stock Exchange .
TMX, in a statement on Saturday, did not say how much the financial institutions -- known as Maple Group Acquisition Corp -- were prepared to pay, only that the proposal was above the current market price for TMX shares.
TMX Group stock closed at C$41.75 on Friday, valuing the company at about C$3.11 billion ($3.2 billion), higher than the LSE offer.
'The Maple proposal, which is not binding and was prepared for discussion purposes, provides for a combination of cash and equity consideration stated to be at a premium to the current market price of TMX Group shares,' TMX said.
The group, whose name invokes Canada's most patriotic symbol, the maple leaf, could represent a more palatable alternative to the LSE proposal for Canadian critics concerned about control of a national institution falling into foreign hands. A TMX-LSE combination could hinder the ability of Canadian resource companies to raise capital and diminish Toronto's importance as a financial center, opponents say.
In addition to the Toronto Stock Exchange, TMX owns the TSX Venture Exchange for small-cap stocks and the Montreal Exchange for derivatives trading.
The LSE confirmed on Saturday it had been notified by the TMX of the rival approach from Maple Group, but said it remained committed to its merger with TMX.
The LSE launched its friendly bid for the TMX, one of the largest concentrations of mining stocks in the world, on Feb. 9, sparking outcry from some of the country's largest banks.
Toronto Dominion Bank and National Bank of Canada were the most vocally opposed, while officials from Canadian Imperial Bank of Commerce and Bank of Nova Scotia suggested they would be OK with the transaction, but in a slightly different form.
The LSE has also met with opposition from some Canadian politicians and companies.
The exchange operator said on Saturday the Maple Group was made up of a number of Canadian financial institutions, including pension funds and banks, but it did not identify them by name. A TMX spokesman was not immediately available for comment.
The announcement follows reports in the local media that three of Canada's biggest banks and a number of its major pension fund managers were considering ways to block the LSE's bid, including a rival offer.
The media reports said a counterbid for TMX might come through Alpha Group, an alternative trading system founded by Canada's biggest banks and the Canadian Pension Plan Investment Board.
But two of Alpha's shareholders, Bank of Montreal and Royal Bank of Canada, are advisers in the LSE-TMX deal and support it.
The TMX said on Saturday it would continue to pursue efforts to secure regulatory and shareholder approvals required to complete its agreed merger with London Stock Exchange Group.
(Reporting by Pav Jordan; Editing by Frank McGurty and Peter Cooney) Keywords: TMX/CANADA (pav.jordan@thomsonreuters.com; +1 416 941 8163) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.