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Premier eFinance: LSE, TMX merger deal collapses, leaving both exchanges vulnerable.
London Stock Exchange’s $3.7 billion (C$3.6 billion) bid to buy the Toronto exchange has fallen through in the face of a higher bid led by a group of Canadian banks, leaving the LSE vulnerable for take over itself.
By: Premier eFinance
The scuttled bid from the London exchange opens the door to a hostile C$3.8 billion offer for TMX Group, operator of the Toronto Stock Exchange, from the Maple Group consortium. The consortium bid is a made-in-Canada alternative to a takeover that would have meant a significant domestic asset would have been under foreign control.
"This is a group of Canadians, businesses that came together and have asserted themselves,"
In having to pull out of Canada, the London exchange has also drawn attention to itself as a takeover target as exchanges consolidate to try to grow and broaden geographic reach, and to enable them to fight off rivals and new market entrants.
Nasdaq OMX Group, still reeling from its own failure in the United States to buy New York Stock Exchange parent NYSE Euronext, may well be a candidate for an alternative transatlantic combination with the LSE.
"While the failed deal probably puts an end to TMX's M&A ambitions, other exchange operators will likely continue to look for partners. This reinforces my belief that we should expect more mergers, not less," Ed Ditmire, New York-based analyst for Macquarie Securities told Premier eFinance sources.
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