Our privacy policy describes how Fidessa uses cookies on our website. If you continue using our website, you are consenting to our use of cookies. OK

Too close to call? LSE v Maple Group

This week is supposed to be crunch time in Canada as investors in the TMX Group vote either to throw their lot in with the London Stock Exchange or retrench within their national borders and develop as the Maple Group. An article in the Financial Times today questioned whether either deal was actually a good one. On the one hand the Maple Group deal looks challenging as the new entity would end up with very high levels of debt and so could be restricted in its strategic options moving forward. On the other hand, the rhetoric coming out of Paternoster Square doesn’t seem to focus on real cost or clearing synergies but, instead, highlights the benefits of becoming a listing powerhouse for mining and natural resource stocks. Put like that you can see why maybe neither offer is enough to set the pulse racing but is the “do nothing” option a realistic one and will a better deal come along for either party in the foreseeable future?

Both the LSE and the Toronto Stock Exchange (TSX) have seen their domestic market share suffer and both are in that awkward middle ground of being neither niche nor a real super power. This is made worse by the fact that exchanges simply cannot hold back the globalisation of capital markets and exist within a vacuum. On these grounds alone the Maple Group bid looks to be on shaky ground especially as, post-deal, it would lack the financial firepower to be a real consolidator outside of Canada.

So, should TMX consummate its relationship with London or sit back and see if a better deal comes along? The LSE has come a long way since it woke up and met the challenges of the post-MiFID landscape. Right now, its blue chip equities volume is about five times that of the TSX and the combined group would certainly have the volume, prestige and financial power to become a real global player.

Nevertheless, it looks like it will still go to the wire but the clincher for me is that if the Maple Group option is such a good thing how come it took a bid from the LSE to bring it out into the open?

Comments
2 Responses to “Too close to call? LSE v Maple Group”
  1. Renee Colyer says:

    Excellent question Steve and an insightful perspective on the State of the Nation, so to speak.

  2. steve grob says:

    Thanks Renee – there is a lot of talk here about the different regulatory challenges both bids face – I wonder whether you or anyone else has a view on which deal faces the more arduous path in this respect?

Leave a comment

Copyright © 2018 Fidessa group plc. All rights reserved.

The information contained within this website is provided for informational purposes only. Fidessa will use reasonable care to ensure that information is accurate at the time it is made available, and for the duration that it remains on the site. The information may be changed by Fidessa at any time without notice. We also reserve the right to close the website at any time. No representation or warranty, expressed or implied, is given on behalf of Fidessa or any of its respective directors, employees, agents, or advisers as to the accuracy or completeness of the information or opinions contained herein or its suitability for any purpose and, save in the case of fraud, all liability for direct, indirect, special, consequential or other loss or damages of whatever kind that may arise from use of the website is hereby excluded to the fullest extent permitted by law. Any decisions you make based on the information in this website are your sole responsibility and information on the website should not be relied upon in connection with any investment decision.

The copyright of this website belongs to Fidessa. All other intellectual property rights are reserved.

Fragulator® is a registered trademark of Fidessa group plc.

Reproduction or redistribution of this information is prohibited except with written permission from Fidessa.