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article imageTSX-LSE merger killed following underwhelming shareholder support

By Justin Crann     Jun 29, 2011 in Business
Toronto - A bid to merge the London and Toronto Stock Exchanges has been terminated after failing to secure the shareholder support it required to come to fruition.
The vote was scheduled for June 30, but in a proxy vote held today only 54 per cent of shareholders were in support of the proposal, the Toronto Sun reports.
The merger, valued at C$3.6 billion, was announced in February. It was the subject of some criticism from reporters and investors, and the New Democratic Party, Canada's official opposition, said the deal was not in the public interest.
As previously reported by Digital Journal, an all-Canadian consortium of banks and financial institutions called Maple Group launched a counter-proposal to the LSE bid, but it was rejected by the board of directors of TMX Group, the company that operates the Toronto Stock Exchange.
Following that rejection, Maple Group rallied additional support and quickly launched a second, $3.8B hostile bid for the Toronto Stock Exchange.
The second Maple offer won the support of Quebec Premier Jean Charest and investment guru Stephen Jarislowsky, primarily because it ensured that jobs would stay in Canada, while the LSE merger didn't.
The failure of the LSE-TSX merger clears the way for the Maple proposal, but shareholders still need to decide if they will embrace that offer or not. If they don't, and the TSX is left without any partner, it could be on rough footing moving forward, an article in the Globe and Mail suggests.
More about Tsx, TSX LSE Merger, LSE, London stock exchange, Toronto Stock Exchange
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