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TMX Group CEO Tom KloetMARK BLINCH/Reuters

The public relations battle over which side is best suited to buy TMX Group Inc. is being cast in ever starker terms as the date for the shareholder vote approaches.

For Xavier Rolet, chief executive officer of London Stock Exchange Group PLC, which wants to merge with TMX and a create a pan-Atlantic player specializing in resource listings, the choice is black and white: Choose the LSE-TMX proposal and get an exchange open to the world that will capture its share of increasingly global markets. Or pick the made-in-Canada Maple Group Acquisition Corp. bid, which wants to protect its closed domestic market and retrench.

For Luc Bertrand, chief pitchman for the hostile Maple Group bid, if shareholders go with the LSE-TMX proposal, Canada stands to lose its status as a global financial centre as the LSE transfers jobs and expertise overseas.

The Maple Group bid - led by a 13-member consortium of Canadian banks, other financial institutions and large pension funds - relies on the stoking of irrational fears, Mr. Rolet said after making a presentation Wednesday at a business luncheon in Montreal.

"It's a project based on fear and one which is focused largely on maintaining protections, a project aimed at keeping the Montreal Exchange as it is while the others in the world grow much faster," he told reporters.

A key issue in the debate about the respective merits of the duelling bids is to what extent the TMX's Montreal-based derivatives activities and expertise will be kept on home turf and continue its mandate to expand and develop new products.

The Quebec government has made it clear it wants iron-clad guarantees that Montreal's role, and the jobs that go with it, will be protected. Quebec Premier Jean Charest said on Tuesday that he would like to see the exchange remain under Canadian ownership.

Accompanying Mr. Rolet on Wednesday, TMX CEO Tom Kloet said Montreal's role and structure, including trading and clearinghouse functions, are guaranteed "forever."

But Mr. Bertrand, speaking at an investors' seminar in Calgary on Wednesday, warned that there is a clear danger of seeing an already world-class exchange based in Canada losing its clout to the dominant LSE.

"The expertise is here. The track record is here. The commitment to generating capital for Canadian enterprises is here, not in London. I simply cannot understand the logic behind trading away these advantages when we clearly have a superior alternative," he told reporters.

Canada's standing as a global centre for financial excellence is at risk with the LSE deal, Mr. Bertrand said, and added that it's possible more partners could join Maple Group, which has ballooned to 13 from nine. "We are still getting inquiries from various parties that are very interested by what we are doing."

The LSE-TMX plan must still win approval from the federal Industry Minister as well as from TMX and LSE shareholders in a vote scheduled for June 30.

Quebec and Ontario securities regulators have also scheduled hearings for next month on the proposed deal.

Under the all-paper LSE-TMX plan, the owner of the LSE would merge with the TMX Group to form a $6-billion exchange, including derivatives in Montreal, equities in Toronto and the venture exchange in Vancouver.

The Maple Group offer is a $3.58-billion cash-and-stock takeover bid.





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Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

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TMX Group Ltd
-1.98%35.73

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