TMX, LSE offer payout to win investor backing
Source: Agencies |
June 24, 2011, Friday
|
Print Edition
Print Edition
TMX Group, owner of the Toronto exchange, has said that it will pay a special cash dividend of CA$4 (US$4.11) per share when it closes its merger with the London Stock Exchange Group, sweetening the deal for shareholders of the Canadian stock market operator.
TMX said on Wednesday the combined company will also pay a regular dividend after the merger that is at least equivalent to the current quarterly rate of 40 Canadian cents per TMX share.
The moves are aimed at enticing shareholders to back the friendly merger, which has come under fire by some critics who argue it would put Canadian stock exchanges under the control of a foreign company.
"The board and senior management believe that the agreed merger with LSEG will deliver the most value for shareholders, market participants and a broad array of stakeholders," TMX Chief Executive Thomas Kloet said.
The TMX insists it would provide huge growth potential in a rapidly consolidating global stock market industry and is more attractive than a hostile bid made by the Maple Group, a consortium of Canadian banks, pension funds, brokerages and insurers.
The move brings the friendly merger's worth closer to the roughly US$3.8 billion value of a rival hostile bid made by the Maple Group.
The TMX-LSE deal is valued at about US$3.5 billion, based on the latest share prices. In addition, shareholders stand to receive US$308 million in the special dividend announced on Wednesday.
In the new arrangement, LSE Group shareholders will also get about US$1.35 per ordinary share. The combined company, which is to be called LTMX, will pay out a total of about US$678 million to the shareholders of both companies.
The special payment and the promise of a generous dividend policy aim to entice shareholders to back the deal and defeat a rival offer from Maple Group.
For the Maple deal to go forward, TMX shareholders must vote down the proposed merger with the London Stock Exchange Group at a meeting on June 30.
The Toronto-London merger deal would see TMX shareholders receive 2.9963 shares in the new company for each TMX share.
TMX said on Wednesday the combined company will also pay a regular dividend after the merger that is at least equivalent to the current quarterly rate of 40 Canadian cents per TMX share.
The moves are aimed at enticing shareholders to back the friendly merger, which has come under fire by some critics who argue it would put Canadian stock exchanges under the control of a foreign company.
"The board and senior management believe that the agreed merger with LSEG will deliver the most value for shareholders, market participants and a broad array of stakeholders," TMX Chief Executive Thomas Kloet said.
The TMX insists it would provide huge growth potential in a rapidly consolidating global stock market industry and is more attractive than a hostile bid made by the Maple Group, a consortium of Canadian banks, pension funds, brokerages and insurers.
The move brings the friendly merger's worth closer to the roughly US$3.8 billion value of a rival hostile bid made by the Maple Group.
The TMX-LSE deal is valued at about US$3.5 billion, based on the latest share prices. In addition, shareholders stand to receive US$308 million in the special dividend announced on Wednesday.
In the new arrangement, LSE Group shareholders will also get about US$1.35 per ordinary share. The combined company, which is to be called LTMX, will pay out a total of about US$678 million to the shareholders of both companies.
The special payment and the promise of a generous dividend policy aim to entice shareholders to back the deal and defeat a rival offer from Maple Group.
For the Maple deal to go forward, TMX shareholders must vote down the proposed merger with the London Stock Exchange Group at a meeting on June 30.
The Toronto-London merger deal would see TMX shareholders receive 2.9963 shares in the new company for each TMX share.
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