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The Competition Bureau is digging deep into the proposed Maple Group deal for TMX. Frank Gunn/The Canadian Press

Frank Gunn/THE CANADIAN PRESS

After months of deliberation, TMX Group's , board of directors has opted to back Maple Group Acquisition Corp.'s $3.8-billion takeover bid.

The support comes after TMX initially rejected the offer in favour of its own merger with London Stock Exchange Group. That deal was ultimately shot down by shareholders back in June and investors have since wondered whether TMX's board would change its mind now that only one deal is left on the table. Late on Sunday, the answer was delivered.

"The board has unanimously determined that the Maple offer is in the best interests of the company, our shareholders and stakeholders, and advises our shareholders to accept the Maple proposal," TMX chairman Wayne Fox said in a statement.

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"This is a unique opportunity to create an integrated exchange and clearing group that can provide efficiencies and new capabilities for the benefit of all market participants," TMX chief executive officer Tom Kloet added. "Further, the investment in our company by leading Canadian pension funds and financial institutions will contribute to the success of our business and will strengthen our ability to compete and grow in the highly competitive global exchange sector."

Maple modified its offer to get TMX behind it. Under the new agreement, TMX's existing senior management will stay in place, and Mr. Kloet will take the helm as Maple's CEO.

As for Maple's board of directors, Mr. Kloet will get a seat, and four independent members of TMX's board will join the team. The new board will also respect TMX's current structure, which ensures that at least 25 per cent of its directors are residents of Quebec and at least 25 per cent have expertise in derivatives.

Maple has also agreed to incorporate the TMX brand into its business, but few details have been provided as to what extent the name will be used.

TMX initially rejected Maple's bid, in large part because it will tack on a pile of debt in order to buy back shares. TMX also worried about getting approval from the federal Competition Bureau, which is still required. At this point, no one knows which way the Bureau is leaning, but it has been meeting with many industry players over the past few months to make sure it understands all of the relevant issues.

Maple's bid must also get regulatory approval from four different provinces. Regulators in Quebec and Ontario have already set up public hearings for the last week of November and first week of December, and for that reason Maple has pushed its offer's expiry date into the new year.

If regulators do not approve the deal, Maple has agreed to pay TMX a $39-million reverse break fee.

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