Maple extends TMX offer to Feb. 29

Maple Group Acquisition Corp., the consortium of 13 financial institutions looking to take control of the owner of the Toronto Stock Exchange, is extending its takeover offer by about a month.

The friendly takeover offer will be open until Feb. 29. It had been set to expire Jan. 31.

The group says it will continue to extend the deadline until it receives a verdict from provincial and federal regulators, which are reviewing how the deal to amalgamate trading and clearing platforms would affect Canada’s capital markets.

“We always said we would table an offer to investors once we’ve met certain conditions, chief among them being regulatory approval,” said spokesman Peter Block.

“So we’re not making investors bet that we will get regulatory approval or we won’t.”

Maple has made numerous submissions to regulators in Ontario, Quebec, Alberta and British Columbia, as well as the federal Competition Bureau in an effort to get approvals for a deal that values the TMX Group (TSX:X) at $3.8 billion.

As part of its bid, Maple plans to buy all of Alpha Trading, an alternative trading system owned by the major players in the Canadian securities industry including the big banks, and CDS Inc., a clearing and depository firm, and add them to TMX Group.

Some smaller investment firms have complained the big brokerages owned by Maple members could receive preferential treatment if the deal goes through and regulators are looking at whether to approve an enlarged TMX.

The Maple group has also tabled two new proposals that it believes will help alleviate some of the concerns, including the CDS pricing model and proposed remedies to address concerns regarding equities trading, Block said Tuesday.

“(The proposals were tabled) with the idea that these two key pieces will address the concerns expressed by the regulators and market participants,” Block said.

The terms of those proposals are not yet being made public.

CDS Inc. is a little-known but central part of Canada’s stock and securities trading. Among other things, it manages the transactions required to complete purchases and sales of securities on Canada’s public markets.

It also manages a number of national databases on behalf of the provincial securities regulators, including the SEDAR repository for regulatory filings by publicly traded companies.

The investors in the Maple Group include the Canada Pension Plan Investment Board, the Ontario Teachers’ Pension Plan, several of the big banks and Manulife.

The Maple Group was formed after TMX Group announced early last year that it wanted to merge with the company that owns the London and Milan stock exchanges, creating a transatlantic organization with special strength in mining.

That deal fell apart, however, after the TMX failed to get sufficient support from its shareholders.