TORONTO, June 23, 2011 /CNW/ - Maple Group Acquisition Corporation ("Maple"), a corporation whose investors comprise 13 of Canada's leading financial institutions and pension funds, today commented on the recommendation made by Institutional Shareholder Services Inc. ("ISS") to its clients regarding the proposed takeover of TMX Group by London Stock Exchange Group plc ("LSE").

Speaking on behalf of Maple, Luc Bertrand said, "ISS has recognized that Maple's offer provides greater value than the LSE take-over, and that the LSE take-over remains subject to significant regulatory risk, and yet recommends its subscribers approve the LSE take-over. We believe the analysis investors will do for themselves will be more sophisticated than what ISS has provided and will lead them to a very different conclusion as to which transaction best serves their interests. The choice is to receive at least $40 in cash from Maple, plus an ongoing stake in an integrated trading and clearing group; or to receive $4 of their own cash paid back to them by the LSE, plus an ongoing stake in a combined LSE-TMX Group, the value of which will largely depend on LSE's ability to generate the same kinds of benefits it has failed to deliver from its take-over of the Borsa Italiana in 2007."

Mr. Bertrand added, "Shareholders must also understand - and we believe, most do -- that if the LSE take-over is approved on June 30thand proceeds, the opportunity to consider Maple's superior offer will be lost. Conversely, a vote against the LSE take-over on June 30th likely gives shareholders more time to consider their options."

Maple urges shareholders to consider the following points when evaluating ISS's recommendation:

  • Maple's offer provides greater value and certainty than the LSE take-over. In its report, ISS wrote: "After sweetening its offer to $50 late in the evening of June 22, Maple Group's bid was again higher than the market value of the [LSE] valuation…The increase in cash pro-ration from 70 to 80 percent also increases the certainty of value in the consideration. All the incremental cash required for the sweetener will come from increased equity commitments from the 13 Maple Group institutional investors. At a $50 valuation, the Maple Group offer presents a premium of approximately 25 percent over TMX's 20-day VWAP on May 12, the day prior to the first announcement of Maple Group's offer."

  • A combined Maple-TMX Group would have an investment grade profile, debt ratios well below TMX Group's own covenants, and the capacity from existing cash flow to reduce leverage from 2.9x EBITDA to 2x EBITDA within two years. Although it provides no analysis to support its view, ISS appears to believe the leverage employed by Maple may have the effect of "potentially limiting future growth strategies." Maple, whose investors have considerable financial expertise and a clear and fully financed vision for creating significant value through the acquisitions of Alpha Group and CDS, disagrees with this view. Maple is investing over $2 billion of equity and has a fully-financed offer. With a combination of investors and operators, Maple and its investors are confident in the proposed capital structure.

  • At the LSE-TMX exchange ratio, the implied value of the LSE take-over at yesterday's market close was $45.01 per share, as compared to the $50 per share value of Maple's offer. ISS based its report on the incorrect assumption that TMX Group shareholders would receive the implied value of the LSE-TMX Group exchange rate, plus the $4 special dividend. This is incorrect for the simple reason that the money that will be used to pay that dividend (and the equivalent amount being paid as a dividend to LSE shareholders) would come off of the combined company's balance sheet. By doing so, the LSE has in some small measure changed the form of consideration being offered, but not the amount. In fact, the value of the Maple offer is currently $5 per share more than the implied value of the LSE take-over. While ISS notes that the current value of LSE's shares may be inflated by speculation that the LSE is a take-over target, it does not disclose how much value it assigned to that probability in analyzing the long-term value of the LSE take-over. ISS also does not appear to have factored into its analysis that Maple's offer will be 22% accretive to TMX Group's 2012 EPS.

  • The LSE transaction remains subject to a "welter of regulatory and other approvals". In its report, ISS wrote: "Certainty of the [LSE] offer is also affected by the welter of regulatory and other approvals required for consummation of the transaction... Among other reviews, the merger requires approval of provincial securities regulators in Ontario and Quebec, since LSE is proposing to acquire more than 10% of TMX. Hearings before these regulators are scheduled for July; no firm date for a regulatory determination has yet been established."

    Yet, despite these and other significant uncertainties facing the LSE transaction, ISS advises its subscribers to consider the LSE transaction to be a "bird in the hand".
  • The LSE take-over is a change of control transaction without a change-of-control premium. ISS believes TMX shareholders would "not cede control" under the LSE take-over. This is at odds with the facts. Under an LSE take-over, LSE shareholders will own a majority of the combined company, directors appointed by the LSE will comprise a majority of the Board, the number of directors appointed by TMX Group may be substantially diluted over time, and the holding company will be regulated by the UK's Financial Services Authority. The LSE and TMX Group may claim their deal is a "merger of equals", presumably to justify a nominal premium and to appeal to Canadian provincial and federal regulators, but it is in fact a take-over.

  • ISS puts its recommendation in the context of global exchange consolidation but there is little evidence to suggest the LSE's strategic rationale can or will create value for TMX shareholders. Maple's offer provides the certainty of significant cash consideration, plus the upside potential from an ongoing ownership stake in an integrated clearing and exchange model that has been employed with great success - and to the benefit of market participants and shareholders alike - in Australia, Hong Kong and Germany. With an integrated business model and the support of 13 institutions with approximately $1 trillion in international assets and investments, Maple has the global orientation and vision to capitalize on opportunities outside of Canada from a position of strength over time.

    By contrast, ISS did not recognize that the LSE promised - and failed to deliver on -- many of the same kinds of benefits it is currently promising the TSX in its 2007 take-over of Borsa Italiana. Specifically:
    • the LSE said its acquisition of the Borsa would enlarge the liquidity pool available to listed companies in Italy, yet since the acquisition, the average daily value of Borsa trades has declined by approximately 54% and the average daily volume of contracts traded has declined by 16%.
    • the LSE said its acquisition would create cross market access opportunities for international listings, yet listings on the Borsa and its MTA international segment are down.
    • the LSE said it would leverage AIM to create a new growth market targeted at Italian issuers, yet the number of new IPOs in 2010 was down by nearly 45% compared to 2007.
    • the LSE said it would join forces with the Borsa to create a pan-European derivatives platform, yet the daily notional turnover for standard equity derivative contracts on the Borsa is down 45% since 2007 and there has been no integration of the Borsa's IDEM derivatives business into a pan-European platform, nor has it enhanced the derivatives business in the local Italian market.

In addition, during the period since the LSE's acquisition of Borsa Italiana in June 2007, the value of TMX Group shares have increased while the value of LSE shares has declined by 29%.

Details of Maple's enhanced offer will be available in Maple's notice of variation, which will be filed on SEDAR and mailed to TMX Group shareholders shortly. A copy of the notice of variation will also be available at

Maple Urges TMX Group Shareholders to Vote AGAINST the LSE Take-over Plan and to Deposit their shares to Maple's Superior Offer

Maple urges TMX Group shareholders to carefully consider Maple's enhanced offer and then take two important actions:

  1. Vote AGAINST the LSE take-over plan by signing, dating and returning the YELLOW proxy before 12:00 Noon (Eastern time) on June 28, 2011; and
  2. DEPOSIT their shares to Maple's offer before it expires at 5:00 p.m. (Eastern time) on August 8, 2011 (unless it is extended or withdrawn) by following the instructions provided in the circular.

TMX Group shareholders are encouraged to call Kingsdale Shareholder Services if they have questions or would like assistance voting their shares and depositing their shares to the Maple offer. Shareholders can reach Kingsdale by email at, or by calling toll-free at 1-888-518-1556 (English or Français). Banks and brokers can call collect at 1-416-867-2272.

About Maple Group Acquisition Corporation

The investors in Maple Group Acquisition Corporation are: Alberta Investment Management Corporation, Caisse de dépôt et placement du Québec, Canada Pension Plan Investment Board, CIBC World Markets Inc., Desjardins Financial Group, Dundee Capital Markets Inc., Fonds de solidarité des travailleurs du Québec (F.T.Q.), GMP Capital Inc., National Bank Financial Inc., Ontario Teachers' Pension Plan, Scotia Capital Inc., TD Securities Inc. and The Manufacturers Life Insurance Company.

This press release is not intended to and does not constitute or form part of an offer or invitation to sell or purchase any securities, the solicitation of an offer to buy or sell any securities or an offer to exchange or otherwise acquire any securities, in any jurisdiction, whether pursuant to the offer described in this press release or otherwise. The circular contains important information and TMX Group shareholders are urged to read it carefully before any decision is made with respect to the offer.

The distribution of this press release in jurisdictions other than Canada may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than Canada should inform themselves about, and observe, any applicable requirements. This press release does not purport to comply with the laws of any non-Canadian jurisdiction and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside Canada.

Information for U.S. Shareholders

The offer is being made for the securities of a Canadian company that does not have securities registered under Section 12 of the U.S. Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"). Accordingly, the offer is not subject to Section 14(d) of the U.S. Exchange Act, or Regulation 14D promulgated by the U.S. Securities and Exchange Commission (the "SEC") thereunder. The offer is being conducted in accordance with Section 14(e) of the U.S. Exchange Act and Regulation 14E promulgated by the SEC thereunder (with settlement being subject to a longer period than would typically apply for securities of U.S. public companies).

The Maple shares to be issued to shareholders (including U.S. shareholders) other than Maple pursuant to the plan of arrangement have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or under the securities law of any state or other jurisdiction of the United States. The Maple shares to be issued pursuant to the plan of arrangement will be issued in reliance upon the exemption from the registration requirements of the U.S. Securities Act provided by section 3(a)(10) thereof and only to the extent that corresponding exemptions from the registration or qualification requirements of state "blue sky" securities laws are available.

All dollar references in this press release are in Canadian dollars. On June 22, 2011, the Bank of Canada noon rate of exchange for U.S. dollars was CDN. $1.00 - U.S. $1.0282.

Notice To Shareholders In The United Kingdom And European Economic Area

The offer is only being made within the European Economic Area ("EEA") pursuant to an exemption under Directive 2003/71/EC (together with any applicable adopting or amending measures in any relevant member state (as defined below), the "Prospectus Directive"), as implemented in each member state of the EEA (each, a "relevant member state"), from the requirement to publish a prospectus that has been approved by the competent authority in that relevant member state and published in accordance with the Prospectus Directive as implemented in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in that relevant member state, all in accordance with the Prospectus Directive. Accordingly, in the EEA, the offer and documents or other materials in relation to Maple Shares are only addressed to, and are only directed at, (a) qualified investors in a relevant member state within the meaning of Article 2(1)(e) of the Prospectus Directive, as adopted in the relevant member state, and (b) persons who hold, and will tender, the equivalent of at least €50,000 worth of TMX Shares (collectively, "permitted participants"). These documents may not be acted or relied upon by persons in the EEA who are not permitted participants.

With reference to the U.K. Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), the offer and any materials in relation to Maple Shares is only directed at persons in the United Kingdom that are (a) investment professionals falling within Article 19(5) of the Order or who fall within Article 49(2)(a) to (d) of the Order; (b) holders of TMX Shares at the time of communication of the offer and such materials; or (c) persons to whom they may otherwise lawfully be communicated (collectively, "relevant persons"). In the United Kingdom, Maple Shares are only available to, and the offer may only be accepted by, relevant persons who are also permitted participants, and as such, any investment or investment activity to which this document relates is available only to, and may be relied upon only by, relevant persons who are also permitted participants.

Caution Regarding Forward-Looking Information

This document contains "forward-looking information" (as defined in applicable Canadian securities legislation). This information is based on the current expectations, assumptions, projections, estimates and other factors that the management of Maple and its investors believe to be relevant as of the date of this document. This information is naturally subject to uncertainty and changes in circumstances. The forward-looking information contained in this document includes, but is not limited to, statements relating to the proposed acquisition of TMX Group by Maple, and the effects thereof, and the proposed subsequent combination with Alpha Group and CDS, and the effects thereof, and other statements other than historical facts.

Often, but not always, forward-looking statements and forward-looking information can be identified by the use of the words ''expect'', ''will'', ''intend'', ''estimate'', ''may'' and similar expressions. Forward-looking statements are necessarily based upon a number of factors, estimates and assumptions that, while considered reasonable by Maple and its investors, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned that such forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Maple and/or its subsidiaries to be materially different from the estimated future results, performance or achievements expressed or implied by those forward looking statements and information and the forward-looking statements and information are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: the satisfaction of the conditions to the proposed acquisition of TMX Group, failure to acquire Alpha Group or CDSL; the inability to successfully integrate TMX Group's operations with those of Alpha Group and CDSL, including, without limitation, incurring and/or experiencing unanticipated costs and/or delays or difficulties; future levels of revenues being lower than expected; conditions affecting the industry; local and global political and economic conditions; unforeseen fluctuations in trading volumes; competition from other exchanges or marketplaces, including alternative trading systems and new technologies, on a national and international basis; foreign exchange rate fluctuations and interest rate fluctuations (including from any potential credit rating decline); legal or regulatory developments and changes; the outcome of any litigation; the impact of any acquisitions or similar transactions; dependence on the economy of Canada; competitive products and pricing pressures; success of business and operating initiatives; failure to retain and attract qualified personnel; failure to implement strategies; dependence on information technology; dependence on adequate numbers of customers; risks associated with clearing operations; inability to protect intellectual property; the adverse effect of a systemic market event on the derivatives business; risks associated with integrating the operations, systems, and personnel of new acquisitions; dependence on market activity that cannot be controlled and/or conditions in the securities market that are less favourable than expected; and changes in the level of capital investment. Other factors could also cause actual results to differ materially from those in the forward-looking information.

Actual results, events, performances, achievements and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking information contained in this document. Maple and its investors make no representations as to present or future value or the present or future trading price of any security, including Maple shares.

Given these risks and uncertainties, investors should not place undue reliance on forward-looking information as a prediction of actual results. Neither Maple nor its investors nor any of their respective affiliated companies undertakes any obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except to the extent legally required.

SOURCE Maple Group Acquisition Corporation

For further information:

TMX Group shareholders:
Kingsdale Shareholder Services Inc. Toll-free 1-888-518-1556 (English and Français)

Media Contact:
Peter Block

Jean-Sébastien Lamoureux

Investor Contact:
Rudy Sankovic

Profil de l'entreprise

Maple Group Acquisition Corporation

Renseignements sur cet organisme


Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .


Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.


Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.