According to CTV
, those holding shares in the Montreal Exchange (MX) will be compensated with half their holdings in TSX Group shares and $13.95 in cash. On Feb. 13, MX shareholders will vote on whether or not the merger should take place. Approval from two-thirds of shareholders is needed for the deal to go through.
The two exchanges would remain the charge of their respective CEOs, but they will be a single corporate entity, said BNN's Michael Kane Monday.
The MX and TSX exist separately under a non-competition deal that has been in place since 1999. The Montreal Exchange is Canada's only market for trade in financial derivatives, while the Toronto Stock Exchange is a conglomerate of many smaller boards trading in equity. The non-competition agreement is set to expire in 2009.
MX head Luc Bertrand is enthusiastic about the merger. He told the CBC
that Montreal has been building a strong market in financial derivatives over the past several years, and the deal will keep Montreal at the centre of this emerging market. MX directors are recommending that their shareholders vote for the deal.
The fledgling TSX Group will be managed from Toronto. The merger follows an international trend of merging stock exchanges to cut operating costs.