The LSE\u2019s bid for TMX was trumped late on Wednesday by rival Canadian consortium Maple, playing the nationalist card, and was supported by large Canadian banks such as Toronto-Dominion. At the end of last year, British mining group BHP was forced to scrap a takeover of another Canadian company, Potash Corporation, after the government in Ottawa ruled the deal provided no \u201cnet benefit\u201d to Canada.<\/p>\n
Although Maple\u2019s offer for TMX was worth more than the LSE\u2019s and offered a \u201cCanadian solution\u201d, its merger plan could be blocked on competition grounds.<\/p>\n
TMX said a majority of shareholder proxy votes supported the LSE merger resolution. \u201cHowever, it is clear that the two-thirds threshold required to approve the merger would not have been achieved.\u201d
\nRolet said: \u201cWe are clearly disappointed that, despite a majority of both LSE and TMX Group shareholders voting for our recommended merger, the two-thirds approval threshold for TMX Group shareholders was not met and hence the merger will now not proceed.\u201d<\/p>\n
He added: \u201cOur group is in good shape and financially robust. Whilst the merger with TMX Group was an exciting opportunity for LSE, we continue to see other significant growth opportunities.\u201d<\/p>\n
In terminating the merger agreement, TMX has agreed to pay a $10m (\u00a36.3m) break fee to the LSE, and a further $29m if, within 12 months, it merges with Maple.<\/p>\n
Simon Maughan, an analyst at broker MF Global, said: \u201cThe failure of the TMX deal will leave the LSE a target as investors have bought into the stock recently in the belief the TMX bid will fail and the LSE will end up on the block.\u201d<\/p>\n
Arnaud Giblat at UBS said there was an obvious candidate waiting for the London exchange should the LSE\u2019s offer for TMX fail: \u201cNasdaq seems to want to bulk up and the LSE fits the bill.\u201d
\nCanada\u2019s main opposition party argued the LSE\/TMX deal was not in the public interest and demanded the government hold a public inquiry. The left-leaning New Democratic Party said the arrangement, as structured, \u201cwas flawed and would lead to a foreign takeover of Canada\u2019s capital markets\u201d. It urged the federal government, which has a majority of seats in the legislature, to refrain from giving the deal its \u201crubber-stamp\u201d approval.
\nUnder Canadian law, any foreign acquisition or investment over C$312m (\u00a3200m) requires federal government approval and must pass a test ensuring it provides a net benefit to the country.<\/p>","protected":false},"excerpt":{"rendered":"
The LSE\u2019s bid for TMX was trumped late on Wednesday by rival Canadian consortium Maple, playing the nationalist card, and was supported by large Canadian banks such as Toronto-Dominion. At the end of last year, British mining group BHP was forced to scrap a takeover of another Canadian company, Potash Corporation, after the government in …<\/p>","protected":false},"author":1,"featured_media":1744,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1812","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-unrecognized"],"yoast_head":"\n