- On a fully pro-rated basis, enhanced offer provides $40 in cash per share, an increase of $6.40 in cash per share, plus ongoing ownership stake in Maple
- Enhanced integrated acquisition transaction valued at $3.8 billion
- 30% premium to May 12, 2011 implied value of LSE take-over plan
- In order for Maple’s superior transaction to proceed TMX Group shareholders need to vote AGAINST the LSE take-over plan no later than June 28, 2011
Maple Group Acquisition Corporation ("Maple"), a corporation whose investors comprise 13 of Canada’s leading financial institutions and pension funds, today announced that it has increased the offer price and the maximum cash consideration being offered to shareholders of TMX Group Inc. ("TMX Group") (TSX: X) as part of an integrated acquisition transaction to acquire 100% of the TMX Group shares now valued at approximately $3.8 billion.
Under the enhanced terms, Maple is increasing its offer price to $50 per share from $48, and is increasing the number of shares to be purchased for cash under the offer from 70% to a maximum of 80% of the TMX Group shares. The offer remains subject to a non-waivable minimum tender condition of 70% of the TMX Group shares. The offer will be followed by a second step court-approved plan of arrangement providing for a corresponding increase in the value of the share consideration per TMX Group share. The increased cash purchase price will be funded entirely by additional proportionate equity investments by the Maple investors.
Assuming the minimum of 70% of the TMX Group shares are acquired for cash under Maple's offer, former TMX Group shareholders would own 41.7% of Maple following the second step plan of arrangement, up from 40%. This will ensure that TMX Group shareholders receive equivalent value per share on the first step offer and second step arrangement. Assuming the maximum of 80% of the TMX Group shares are acquired for cash under the first step offer, former TMX Group shareholders would own 27.8% of Maple following the second step arrangement.
The offer price represents a premium of approximately 25% over the volume-weighted average price of the TMX Group shares on the Toronto Stock Exchange for the 20 trading days ending on May 12, 2011, the day prior to the date when Maple presented its acquisition proposal to the Board of Directors of TMX Group, and a 30% premium over the implied value of the LSE take-over plan based on the closing price of the shares of LSE and the Bank of Canada noon exchange rate on May 12, 2011.
Speaking on behalf of Maple’s investors, Luc Bertrand said, “Maple’s offer continues to provide far greater value and certainty than the LSE take-over, as well as a stronger, more valuable and more sustainable business model for the TMX Group going forward. We believe the choice is clear. TMX Group shareholders must understand that if the LSE take-over proceeds, the opportunity to consider our superior offer will be lost. The only choice for shareholders who want to preserve the ability to consider our superior offer is to vote against the LSE take-over.”
“The LSE proposes to return a bit of cash to shareholders but hasn’t changed the fundamental value of its offer. There is no doubt that our offer is superior to the LSE take-over and we continue to be prepared to engage in discussions with the TMX Board. We remain confident in our ability to obtain all necessary regulatory approvals and, in the context of a TMX Board supported transaction, would be prepared to negotiate a reverse break fee payable to TMX Group in the event the transaction does not proceed as a result of Maple not receiving Competition Bureau approvals to subsequently combine TMX Group with Alpha and CDS. In contrast, the LSE take-over continues to be conditional upon the willingness of regulators in Ontario and Quebec to abandon a key Canadian public interest protection limiting ownership of the TMX Group to 10% for any one investor, as well as upon approval under the Investment Canada Act,” said Mr. Bertrand.
Details of Maple’s enhanced offer will be available in Maple’s notice of variation, which will be filed on SEDAR and mailed to TMX Group shareholders shortly. A copy of the notice of variation will also be available at www.abetterexchange.com.
Maple Urges TMX Group Shareholders to Vote AGAINST the LSE Take-over Plan
Maple urges TMX Group shareholders to carefully consider the information provided in Maple’s circular and then take two important actions:
1. Vote AGAINST the LSE take-over plan by signing, dating and returning the YELLOW proxy before 12:00 Noon (Eastern time), on June 28, 2011; and
2. DEPOSIT their shares to Maple’s offer before it expires at 5:00 p.m. (Eastern Time) on August 8, 2011 (unless it is extended or withdrawn) by following the instructions provided in the circular.
TMX Group shareholders are encouraged to call Kingsdale Shareholder Services if they have questions or would like assistance voting their shares and depositing their shares to the Maple offer. Shareholders can reach Kingsdale by email at contactus@kingsdaleshareholder.com, or by calling toll-free at 1-888-518-1556 (English or Français). Banks and brokers can call collect at 1-416-867-2272.
Combination with Alpha Group and CDS
As previously announced, Maple intends to pursue the combination of TMX Group with Alpha Group and The Canadian Depositary for Securities Limited (“CDS”) as soon as possible following the completion of Maple’s acquisition of TMX Group.
Certain Maple investors have a significant equity ownership interest in each of Alpha Group and CDS and have agreed to use commercially reasonable efforts to complete transactions pursuant to which Alpha Group and CDS will be combined with TMX Group. As detailed in the circular, Maple intends to form a committee of independent directors to oversee the process of evaluating and consummating the Alpha Group and CDS transactions, including ensuring that the consideration to be offered is fair to shareholders. If the parties are unable to agree on the consideration for either of the Alpha Group or CDS transactions, the matter will be submitted to a binding arbitration process.
Although Maple's offer to acquire TMX Group is not conditional on the concurrent combination with Alpha Group and CDS, Maple is seeking the required regulatory approvals, including Competition Act and applicable securities regulatory approvals from the Autorité des marchés financiers and the Alberta, British Columbia and Ontario Securities Commissions, for such combinations, and the acquisition of TMX Group by Maple is conditional on receipt of such regulatory approvals. Maple has submitted its notifications under Part IX of the Competition Act and is continuing to dialogue with the Competition Bureau in the usual merger review process.
Conditions
In addition to the regulatory approvals referred to above, the acquisition of TMX Group is subject to customary conditions and a non-waivable condition that 70% of TMX Group shares outstanding at the expiry time be validly deposited under the offer. Neither the acquisition of TMX Group, nor the subsequent combinations with Alpha or CDS, requires approval under the Investment Canada Act.
Minimum and Full Deposit Elections
Maple’s offer includes a non-waivable minimum tender condition that requires 70% of TMX Group shares outstanding be deposited to the offer. Maple recognizes TMX Group shareholders who support the offer may also want to retain as many of their TMX Group shares as possible in order to participate in the successor company and its ongoing upside potential. Accordingly, the offer includes a “minimum deposit” election designed to provide TMX Group shareholders with the opportunity to support Maple’s transaction by having only the minimum number of TMX Group shares acquired for cash while still satisfying the minimum tender condition.
Shareholders who would like to receive as much cash as possible for their TMX Group shares should make the “full deposit” election. More information on these elections is provided in the circular.
Integrated Transaction
Following completion of the first step offer, Maple will proceed with the second step arrangement and will use its best efforts to complete the arrangement within 35 days of expiry of the offer. As the offer is subject to a non-waivable minimum tender condition of 70% of TMX Group shares, the applicable corporate law shareholder approval for the arrangement will be assured if Maple acquires shares under the offer. The effect of exemptive relief obtained by Maple is to provide that minority approval of the second step arrangement will be achieved if more than 50% of the TMX Group shares held by minority shareholders are acquired under the offer. This threshold will be met if the non-waivable 70% minimum tender condition is satisfied. If the minimum tender condition is not achieved, Maple will not acquire any TMX Group shares under the offer.
The terms of the offer provide that if the conditions to the offer are satisfied or, in the case of conditions other than the minimum tender condition, waived, Maple will make a public announcement of this fact and the offer will remain open for tenders of TMX Group shares for 10 days from the date of such announcement. This 10-day extension period is intended to give shareholders the opportunity to receive cash by providing the ability to deposit their TMX Group shares after they know that the offer will be successful. It also provides a mechanism for shareholder approval of the integrated acquisition transaction that is intended to ensure that shareholders can separate the decision to tender shares to the offer from the approval or disapproval of the integrated acquisition transaction.
Financial Advisors
Maple is being advised by CIBC World Markets Inc., National Bank Financial Markets, Scotia Capital Inc. and TD Securities Inc.
About Maple Group Acquisition Corporation
The investors in Maple Group Acquisition Corporation are: Alberta Investment Management Corporation, Caisse de dépôt et placement du Québec, Canada Pension Plan Investment Board, CIBC World Markets Inc., Desjardins Financial Group, Dundee Capital Markets Inc., Fonds de solidarité des travailleurs du Québec (F.T.Q.), GMP Capital Inc., National Bank Financial Inc., Ontario Teachers' Pension Plan, Scotia Capital Inc., TD Securities Inc. and The Manufacturers Life Insurance Company.
This press release is not intended to and does not constitute or form part of an offer or invitation to sell or purchase any securities, the solicitation of an offer to buy or sell any securities or an offer to exchange or otherwise acquire any securities, in any jurisdiction, whether pursuant to the offer described in this press release or otherwise. The circular contains important information and TMX Group shareholders are urged to read it carefully before any decision is made with respect to the offer.
The distribution of this press release in jurisdictions other than Canada may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than Canada should inform themselves about, and observe, any applicable requirements. This press release does not purport to comply with the laws of any non-Canadian jurisdiction and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside Canada.
Information for U.S. Shareholders
The offer is being made for the securities of a Canadian company that does not have securities registered under Section 12 of the U.S. Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"). Accordingly, the offer is not subject to Section 14(d) of the U.S. Exchange Act, or Regulation 14D promulgated by the U.S. Securities and Exchange Commission (the "SEC") thereunder. The offer is being conducted in accordance with Section 14(e) of the U.S. Exchange Act and Regulation 14E promulgated by the SEC thereunder (with settlement being subject to a longer period than would typically apply for securities of U.S. public companies).
The Maple shares to be issued to shareholders (including U.S. shareholders) other than Maple pursuant to the plan of arrangement have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or under the securities law of any state or other jurisdiction of the United States. The Maple shares to be issued pursuant to the plan of arrangement will be issued in reliance upon the exemption from the registration requirements of the U.S. Securities Act provided by section 3(a)(10) thereof and only to the extent that corresponding exemptions from the registration or qualification requirements of state “blue sky” securities laws are available.
All dollar references in this press release are in Canadian dollars. On June 22, 2011, the Bank of Canada noon rate of exchange for U.S. dollars was CDN. $1.00 - U.S. $1.0282.
Notice To Shareholders In The United Kingdom And European Economic Area
The offer is only being made within the European Economic Area ("EEA") pursuant to an exemption under Directive 2003/71/EC (together with any applicable adopting or amending measures in any relevant member state (as defined below), the "Prospectus Directive"), as implemented in each member state of the EEA (each, a "relevant member state"), from the requirement to publish a prospectus that has been approved by the competent authority in that relevant member state and published in accordance with the Prospectus Directive as implemented in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in that relevant member state, all in accordance with the Prospectus Directive. Accordingly, in the EEA, the offer and documents or other materials in relation to Maple Shares are only addressed to, and are only directed at, (a) qualified investors in a relevant member state within the meaning of Article 2(1)(e) of the Prospectus Directive, as adopted in the relevant member state, and (b) persons who hold, and will tender, the equivalent of at least €50,000 worth of TMX Shares (collectively, "permitted participants"). These documents may not be acted or relied upon by persons in the EEA who are not permitted participants.
With reference to the U.K. Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), the offer and any materials in relation to Maple Shares is only directed at persons in the United Kingdom that are (a) investment professionals falling within Article 19(5) of the Order or who fall within Article 49(2)(a) to (d) of the Order; (b) holders of TMX Shares at the time of communication of the offer and such materials; or (c) persons to whom they may otherwise lawfully be communicated (collectively, "relevant persons"). In the United Kingdom, Maple Shares are only available to, and the offer may only be accepted by, relevant persons who are also permitted participants, and as such, any investment or investment activity to which this document relates is available only to, and may be relied upon only by, relevant persons who are also permitted participants.
Caution Regarding Forward-Looking Information
This document contains "forward-looking information" (as defined in applicable Canadian securities legislation). This information is based on the current expectations, assumptions, projections, estimates and other factors that the management of Maple and its investors believe to be relevant as of the date of this document. This information is naturally subject to uncertainty and changes in circumstances. The forward-looking information contained in this document includes, but is not limited to, statements relating to the proposed acquisition of TMX Group by Maple, and the effects thereof, and the proposed subsequent combination with Alpha Group and CDS, and the effects thereof, and other statements other than historical facts.
Often, but not always, forward-looking statements and forward-looking information can be identified by the use of the words ''expect'', ''will'', ''intend'', ''estimate'', ''may'' and similar expressions. Forward-looking statements are necessarily based upon a number of factors, estimates and assumptions that, while considered reasonable by Maple and its investors, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned that such forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Maple and/or its subsidiaries to be materially different from the estimated future results, performance or achievements expressed or implied by those forward looking statements and information and the forward-looking statements and information are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: the satisfaction of the conditions to the proposed acquisition of TMX Group, failure to acquire Alpha Group or CDSL; the inability to successfully integrate TMX Group's operations with those of Alpha Group and CDSL, including, without limitation, incurring and/or experiencing unanticipated costs and/or delays or difficulties; future levels of revenues being lower than expected; conditions affecting the industry; local and global political and economic conditions; unforeseen fluctuations in trading volumes; competition from other exchanges or marketplaces, including alternative trading systems and new technologies, on a national and international basis; foreign exchange rate fluctuations and interest rate fluctuations (including from any potential credit rating decline); legal or regulatory developments and changes; the outcome of any litigation; the impact of any acquisitions or similar transactions; dependence on the economy of Canada; competitive products and pricing pressures; success of business and operating initiatives; failure to retain and attract qualified personnel; failure to implement strategies; dependence on information technology; dependence on adequate numbers of customers; risks associated with clearing operations; inability to protect intellectual property; the adverse effect of a systemic market event on the derivatives business; risks associated with integrating the operations, systems, and personnel of new acquisitions; dependence on market activity that cannot be controlled and/or conditions in the securities market that are less favourable than expected; and changes in the level of capital investment. Other factors could also cause actual results to differ materially from those in the forward-looking information.
Actual results, events, performances, achievements and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking information contained in this document. Maple and its investors make no representations as to present or future value or the present or future trading price of any security, including Maple shares.
Given these risks and uncertainties, investors should not place undue reliance on forward-looking information as a prediction of actual results. Neither Maple nor its investors nor any of their respective affiliated companies undertakes any obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except to the extent legally required.
