TMX
TMX Group Inc. and hostile bidder Maple Group are now in discussions, according to Ontario Finance Minister Dwight Duncan.
The Finance Minister's "understanding was that discussions were happening," said a spokesman for the minister. It is unclear how deep the discussions are between TMX, which owns the Toronto Stock Exchange, and Maple Group, a consortium of 13 Canadian financial institutions.
TMX spokeswoman Carolyn Quick declined to comment.
TMX was precluded from any detailed talks with Maple until two weeks ago, when the company dropped its plan to merge with London Stock Exchange Group PLC. Under the TMX-LSE merger agreement, TMX was barred from discussions with any potential rival suitors.
After the LSE plan fell apart, TMX chief executive officer Tom Kloet said that "we're not anywhere near" a friendly transaction with Maple.
Maple spokesman Peter Block said his group would like a friendly deal. "We hope to complete a transaction with TMX support while being fully committed to following through on our offer," he said.
TMX has been loudly critical of some aspects of the Maple proposal, including the amount of debt Maple plans to use and a perceived lack of clarity on how Maple would run the business. TMX has also said it's unclear how Maple would get its bid past competition regulators.
The Competition Bureau must approve the deal and there are those on Bay Street who are concerned that the Maple plan to combine TMX with the CDS Inc. clearinghouse and the Alpha Group trading system, TMX's biggest rival, may limit competition.
The paucity of details in the Maple bid and the risk that the deal can't get done "cannot be ignored, in our view, despite potential upside for TMX shareholders," RBC Dominion Securities analyst Geoffrey Kwan said in a report earlier this week, in which he concluded that TMX going it alone is "slightly more likely" than an acquisition by Maple with conditions.