LSE battle for TMX hots up
The London Stock Exchange faces a nail-biting fight for Canadian peer TMX Group after aggressive rival bidder Maple trumped its sweetened offer by a whisker overnight.
The British bourse, which had hoped to win over Canadian shareholders of TMX by boosting its agreed $3.3bn (£2bn) all-share bid with a $673.5m special cash dividend on Wednesday, saw Maple retaliate just hours later.
Unashamedly nationalistic Maple, which is backed by 13 of Canada’s largest financial firms, nudged its unsolicited cash and stock bid C$2 per share higher to C$50 a share, valuing its offer at C$3.8 billion (£2.44bn).
With just one week to go before crucial shareholder votes on the agreed LSE deal, LSE chief executive Xavier Rolet is battling to secure the scale and clout the bourse needs to fight off incumbent rivals, nimble new market entrants — and predators.
Some financiers not involved in the deal say Rolet has played his last hand. Betting against an escalating bid war, one said the prospects of securing TMX “did not look good.”
“It would look bad if they raised and then raised again just a week before the shareholder vote. It would be like a game of tennis,” he added.
Numis Securities analyst James Hamilton said: “I suspect the LSE shareholders will approve the deal on June 30 — whereas it is a close call which way the TMX shareholders will go.”
Analysts noted that the LSE’s special dividend – 84.1 pence per LSE share and C$4.0 per TMX share – might add a welcome element of cash to the agreed offer, but it also meant the company would have to borrow to pay for it.
“The LSE dividend has nothing to do with the value of the deal, rather the dividend means only cash for shareholders and a more leveraged business. The tax benefit is the only way the dividend makes the offer more attractive,” Hamilton said.