Maple bid puts onus on LSE

The exchange, which on Wednesday announced a special dividend for its own and TMX shareholders in an effort to boost support for its merger, now faces a tough decision after Maple reacted quickly by nudging its bid ahead of the LSE’s.

Maple, which is backed by 13 of Canada’s largest financial firms, said yesterday it had raised its bid to C$50 a share from C$48 a share and increased the number of shares it wanted to 80 per cent from 70 per cent.

A spokeswoman for the LSE declined to comment. Shares in the exchange were down 0.6 per cent in early trading, as the onus fell back on the LSE to react to Maple’s latest move.

“If the LSE doesn’t get TMX then someone’s probably going to come and bid for them,” said one of the LSE’s 50 largest shareholders.

A failure by the LSE to secure the Canadian exchange group could leave the British exchange a takeover target itself, possibly for Nasdaq OMX which has tried hostile takeovers of the LSE twice in the past five years.

Proxy advisory firm ISS said it recommends that TMX shareholders vote in favour of a proposed combination with the LSE.

The firm said there is little incentive for shareholders to support the alternative cash-and-stock offer from Maple Group given the level of leverage involved in that offer. “We recommend shareholders take the bird in hand and vote for the proposed merger-of-equals with the LSE,” the firm said.