Canada banks say no to LSE takeover

Canadian banks will declare their opposition to a proposed £1.9bn takeover of the TMX Group by the London Stock Exchange, sources said, raising a formidable new obstacle to regulatory approval of the deal.
By The Newsroom
Published 10th Mar 2011, 08:49 BST

Four of the country’s six top banks have penned a letter outlining their concern that the deal would hurt Toronto’s ambitions to become a global financial services hub, two bank sources said. They spoke on the condition of anonymity because they were not authorised to discuss the matter.

The TMX operates the Toronto Stock Exchange and the TSX Venture Exchange for small-capitalisation companies.

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“Toronto’s hopes to be a global financial services hub could suffer a severe and potentially irreversible setback,” a draft of the banks’ letter states.

Opposition within Canada’s powerful banking industry comes on top of the sharp criticism voiced by provincial lawmakers since the deal was announced last month.

The four banks that will sign the letter – Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and National Bank of Canada – have no interest in the deal.

The other two – Royal Bank of Canada and Bank of Montreal – are advising the LSE and the TMX respectively.

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The LSE/TMX deal faces a complex, multi-tiered approval process at provincial and federal levels.

It has come under heated attack in Ontario, the Canadian province that is home to the nation’s financial hub of Toronto.

Related topics:CanadaOpposition