Maple Group Acquisition Corp. has won control of TMX Group Inc. and after more than a year of negotiating with executives, shareholders and regulators, a strong 91 per cent of shares have been tendered to its takeover offer worth about $3.8-billion.
A new Maple board of directors has already been appointed, with TMX CEO Tom Kloet taking on the chief executive role at both Maple and TMX, as well as serving on both boards of directors.
“TMX Group is pleased with today’s outcome,” Mr. Kloet said late Tuesday.
“Tomorrow, we will welcome employees from CDS and Alpha to our organization and together we will build an even stronger, more competitive company. We are excited by the opportunities before us and are committed to serving all of our clients with excellence and innovation in the months and years ahead.”
The new company, which will be renamed TMX Group Ltd. next month, will own the Toronto Stock Exchange, in addition to the alternative Alpha exchange and the country’s largest clearing house CDS, controlling some 90 per cent of trading in Canada.
Maple said it plans to complete the acquisitions of Alpha Trading Systems Inc. and Alpha Trading Systems Ltd. Partnership, as well as The Canadian Depository for Securities Ltd. on Wednesday.
The offer to acquire a minimum of 70 per cent of TMX shares of TMX Group for $50 in cash per share closed at 5 p.m. Tuesday.
But the deadline for tender has been extended until Aug. 10 for any shareholders who were holding out and want to receive cash for their stock.
Shareholders still have to formally vote to accept the deal at a meeting slated for September.
Maple’s original plan was to acquire up to 80 per cent of TMX’s shares, but with 91 per cent, former TMX shareholders now hold fewer than a quarter of its shares.
Maple said the number of TMX Group shares that it has taken up will be prorated at the end of the Aug. 10 deadline so the group would not hold more shares than they outlined to regulators.
Chuck Winograd, who will serve as the chair of both the Maple and TMX Group boards, said he plans to work with the board to ensure the new company lives up to its mandate to act in Canadian interests.
Other directors on the new board include: Luc Bertrand, Denyse Chicoyne, Marie Giguere, George Gosbee, William Hatanaka, Harry Jaako, William Linton, Jean Martel, William T. Royan, Gerri Sinclair, Kevin Sullivan, Anthony Walsh, Eric M. Wetlaufer, and Tom Woods.
Luc Bertrand, who served as a spokesman for the Maple investor group, said the consortium is very pleased with the level of support shareholders have given the deal.
“The company will move forward with a new board that represents a cross-section of experience and knowledge reflecting the importance of the company across the Canadian capital marketplace and the commitments made to regulatory authorities,” he said.
Takeover talks have stretched on for more than a year, starting first in February 2011 when a merger was announced with the owner of the London Stock Exchange. When that transaction was defeated by shareholders, the TMX threw its support behind the Maple bid last October.
The consortium of Canadian banks, pension funds and investment firms cleared its last major regulatory hurdles when securities regulators in B.C. and Alberta signed off on the takeover earlier in July.
Maple required regulatory approvals to merge the owner of the Toronto Stock Exchange with the alternative Alpha Trading System, and clearing and depository firm CDS Inc., which are owned by the major players in the Canadian securities industry, several of which are part of the consortium.
Regulators in Ontario, Quebec, B.C. and Alberta, as well as the federal Competition Bureau, have approved the deal, with certain conditions.
In its most recent quarter, TMX posted net income of $1.8-million in the second quarter, or two cents per share, compared to net income of $54.7 -million, or 73 cents a share, in the same period a year ago. Revenue in the quarter totalled $167.5-million, down slightly from $169.3-million in the year-before quarter.
The investors in Maple are the Alberta Investment Management Corp., Caisse de depot et placement du Quebec, the Canada Pension Plan Investment Board, CIBC World Markets Inc., Desjardins Financial Group, Dundee Capital Markets Inc., Fonds de solidarite des travailleurs du Quebec, National Bank Financial & Co. Inc., Ontario Teachers’ Pension Plan, Scotia Capital Inc., TD Securities Inc. and Manulife Financial.