LSE vows to press on despite rival bid

The London Stock Exchange vowed to press ahead with a merger with its Toronto counterpart, despite the emergence of a rival Canadian bidder.

Over the weekend, Maple Group, which is made up of Canadian pension funds and banks, tabled a £1.8bn bid proposal for the Toronto exchange (TMX) designed to keep the exchange in Canadian hands.

The LSE unveiled its own merger proposal with TMX in February as part of chief executive Xavier Rolet’s desire to play a central role in the consolidation of international stock exchanges.

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It said it remained committed to the deal: “The proposed merger offers compelling financial, strategic and operational benefits for shareholders, the full breadth of market participants, listed companies of all sizes, investors and other stakeholders.”

TMX has said it will assess the higher offer from Maple, but that in the meantime it continued to back its existing merger partner.

The Maple bid is likely to have strong local support as politicians and banks in Canada have already voiced opposition to the LSE plan amid concerns its biggest exchange will be dominated by foreign interests.

But analysts say Maple also has some big hurdles to overcome. Its offer is said to be conditional on receiving the green light to merge the Toronto exchange with Alpha Group, a bank-owned share trading system.

Together, TMX and Alpha would account for more than 80 per cent of share trading in Canada.