TMX-LSEG merger pronounced dead

TMX Group CEO Tom Kloet said the company will continue to look at opportunities, including the offer from Maple Group Acquisition Corporation (Maple), a collection of Canadian financial institutions and pension funds, which is offering $50 a share.

“The TMX Group management and board believe that the TMX-LSEG merger would accelerate our business strategy and create shareholder value, while enhancing the performance of Canada’s capital markets. Although we will not join forces with LSEG, our business is strong and I have enormous confidence in the continued success of our company,” said Kloet.

TMX Group will pay a $10 million break fee to LSEG for terminating the agreement.

If the deal first announced in February had succeeded, the two stock exchanges would have combined for a market cap of C$6.9 billion. The merged entity would have the largest number of natural resources, mining, energy, and clean-technology companies in the world, with 3,600 combined AIM and TSX Venture Exchange listings.

But the deal immediately raised concerns of national interest, with some Canadian politicians objecting to what was seen as a foreign takeover by London. The provincial governments of Quebec and Ontario, and the Ontario Securities Commission, launched reviews of the deal, and in May, a competing bid from Maple emerged as a Canadian alternative. The Maple bid was initially backed by nine banks and pension funds, then expanded to 13.