TORONTO — The takeover of TMX Group (TSX:X) by the Maple Group cleared another hurdle Thursday as securities regulators in Ontario and Quebec released their proposed conditions on the deal.
The consortium of banks, pension funds and insurance companies said if the draft orders, which set rules governing such things as board composition and share ownership restrictions, are finalized as published, it would accept them.
“The recognition orders set out a clear and binding framework that will ensure we maintain open and vibrant exchanges with strong governance, fair and reasonable clearing and depository fees and strong ongoing regulatory oversight,” Maple spokesman Luc Bertrand said in a statement.
“The publication of these orders marks the culmination of an extensive and detailed review process. We look forward to finalizing these matters and implementing our vision for an integrated and more globally competitive exchange in Canada.”
The provincial regulators said they would seek comment on their proposed rules and set a deadline of June 4 to hear from the public.
OSC chairman and chief executive Howard Wetston said the provincial regulator will carefully consider the further input it receives on the proposed orders before making a final determination.
“The commission has thoroughly reviewed the regulatory issues raised by Maple’s proposal and developed measures necessary to ensure that the public interest is protected,” Wetston said.
The federal Competition Bureau remains a significant hurdle for the deal.
The federal regulator said Thursday it would work to complete its own review and consult with the industry regarding the conditions imposed by the securities regulators.
The proposed rules would prevent any shareholder from holding more than a 10 per cent stake in Maple as well as require that at least half of the company’s directors be independent.
The size of Maple’s board will also be larger with 17 directors instead of the 15 that had been first proposed.
The regulators’ approval will be necessary for any new fees or fee models.
Maple has offered $50 per share in cash for between 70 and 80 per cent of the shares of TMX Group with the remaining shares later exchanged for a stake in Maple.
Assuming the maximum of 80 per cent of the TMX Group shares are bought for cash under the first step, former TMX Group shareholders will own 27.8 per cent of Maple following the second step.
Shares in TMX, which had been halted briefly Thursday morning, were up 82 cents at $47.32 on the Toronto Stock Exchange after trading resumed.
Maple is made up of Alberta Investment Management, Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, CIBC World Markets (TSX:CM), Fonds de solidarite des travailleurs du Quebec, National Bank Financial (TSX:NA), Ontario Teachers’ Pension Plan Board, Scotia Capital (TSX:BNS), TD Securities (TSX:TD), Desjardins Financial Group, Dundee Capital Markets (TSX:DC.A), GMP Capital and Manulife Financial (TSX:MFC).