The London Stock Exchange faces a nail-biting fight for Canadian peer TMX Group after aggressive rival bidder Maple trumped its sweetened offer by a whisker overnight.
The British bourse, which had hoped to win over Canadian shareholders of TMX by boosting its agreed $3.3 billion all-share bid with a $673.5-million special cash dividend on Wednesday, saw Maple retaliate just hours later.
Unashamedly nationalistic Maple, which is backed by 13 of Canada's largest financial firms, nudged its unsolicited cash and stock bid $2 per share higher to $50 a share, valuing its offer at $3.8 billion.
With just one week to go before crucial shareholder votes on the agreed LSE deal, LSE Chief Executive Xavier Rolet is battling to secure the scale and clout the bourse needs to fight off incumbent rivals, nimble new market entrants -- and predators.
Some financiers not involved in the deal say Rolet has played his last hand. Betting against an escalating bid war, one said the prospects of securing TMX "did not look good."
Numis Securities analyst James Hamilton said: "I suspect the LSE shareholders will approve the deal on June 30 -- whereas it is a close call which way the TMX shareholders will go."
Analysts noted that the LSE's special dividend - 84.1 pence per LSE share and $4.00 per TMX share - might add a welcome element of cash to the agreed offer, but it also meant the company would have to borrow to pay for it.
The London and Canadian exchanges say their tie-up will create a transatlantic stock trading powerhouse with a particular specialization in minerals and raw materials companies, the existing strength of the Toronto Stock Exchange.
But critics say it would propel a key Canadian firm into foreign hands, and Maple is pitching itself as a "made-in-Canada" solution.
TMX said it acknowledged the new Maple offer and would review it.
A spokeswoman for the LSE declined to comment on Thursday. Shares in the British exchange were flat at 957 pence in midday trade, bucking a weak FTSE 250 index. Analysts have long said the price reflects market hopes of an LSE takeover.
The exchange, which fought off the unwanted attention of bidders before Rolet took the helm just over two years ago, would be back in play if its fails to buy TMX.
U.S.-based exchange operator Nasdaq OMX, which failed to derail an agreed merger between Deutsche Boerse and NYSE Euronext, has twice tried and failed with hostile LSE takeovers in the past five years.
