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TMX Broadcast Centre manager Kris Backus pauses in front of the centre's display board in Toronto on Monday May 16, 2011. (Frank Gunn/THE CANADIAN PRESS)
TMX Broadcast Centre manager Kris Backus pauses in front of the centre's display board in Toronto on Monday May 16, 2011. (Frank Gunn/THE CANADIAN PRESS)

Maple Group close to expanding its membership Add to ...

The group of banks and pension funds that's making a play for the TMX Group Inc. is close to striking at least a couple of deals to expand its membership.

The so-called Maple Group is currently in talks with Manulife Financial , Desjardins Financial, GMP and Dundee Capital , according to sources. The first two companies on that list are among the most eager to take part, one person familiar with the situation said. While the negotiations are likely to produce results, there is still a chance that they could fall apart.

A deal to broaden the group would be good for the consortium, because the additional members would signal to regulators that Maple's bid has broader support among the financial community. Importantly, the new members would dilute the current members' stakes - meaning that the banks would each hold a smaller piece of the TMX if the bid succeeds. That's key, because the consortium is aware that there is public opposition to the notion that the banks could once again wind up controlling the stock exchange, said one person familiar with the talks.

On the flip side, the Maple consortium is reluctant to expand its membership too far too quickly because that might make it harder to manage the process by slowing down the group's ability to make fast decisions. The initial members do not want the group to become unwieldy.

As a result, they are being very deliberate in these discussions, choosing potential partners that represent major areas of the financial sector and who could smooth the consortium's path through the regulatory challenges that lie ahead, but not opening up membership more broadly than necessary, sources said. They are not, for instance, in talks with other major life insurers.

Even as the group considers bringing additional members on board, it is also working to finish its circular and other documents that will give TMX shareholders and authorities more information about its bid. That document should be out this week or next.

 

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