Maple Group, the consortium of Canadian financial services firms bidding to acquire TMX Group, has reaffirmed its commitment to the acquisition as questions are raised over the likelihood of the deal going through.
The share price of TMX Group, the Canadian exchange operator, is trading around C$10 ($10.2) below the offer from Maple Group, indicating investors are unsure if the acquisition will be successful.
Despite the low share price, Maple Group says it remains committed to its plan, according to Reuters.
‘Maple does continue to work with the regulators for its bid for the TMX, while at the same time having discussions with the TMX,’ says Peter Block, a spokesman for the group, reports the news organisation. Discussions also continue with TMX shareholders, adds Block.
Earlier this month, Maple Group, which is made up of some of Canada’s largest banks, pension funds and other market participants, pushed back the deadline for its C$3.8 bn ($3.9 bn) offer to September 30.
The consortium said it would use the additional time to work toward getting the various regulatory approvals required for the offer to go through. It added that it would extend the deadline further if necessary.
‘Maple remains committed to its offer and is confident it can secure all necessary regulatory approvals by late fall,’ the consortium said in a statement at the time.
Maple Group launched its offer for TMX Group in May in a bid to derail the planned merger between the Canadian exchange operator and the London Stock Exchange.
The proposed TMX-LSE merger was scrapped after TMX Group failed to secure enough support from its own shareholders for the deal.
Investors think regulators may object to Maple Group, which is made up of financial services firms, controlling Canada’s stock exchange operations, says Yemi Oshodi, managing director of M&A at WallachBeth Capital, reports Bloomberg.
‘I’m just really beginning to doubt that this thing is going to get regulatory clearance,’ Oshodi says in the Bloomberg article.
Antitrust regulators might also object because Maple Group’s plan would combine control of TMX Group and its biggest rival, Alpha Group, adds Bloomberg, citing a concern of Macquarie.
[Article by Tim Human, Inside Investor Relations]