Maple inches closer to TMX takeover

Source: Maple

Maple Group Acquisition Corporation ("Maple") and TMX Group Inc. ("TMX Group") (TSX:X) today announced that they have been advised that the Ontario Securities Commission ("OSC") has approved final recognition orders with respect to Maple's proposed acquisition of TMX Group, Alpha Trading Systems Inc. and Alpha Trading Limited Partnership (collectively, "Alpha") and The Canadian Depository for Securities Limited ("CDS").

It is expected that these recognition orders will be published by the OSC later today. These orders provide the terms under which the OSC will permit Maple to operate a combined exchange and clearing group. Maple and the Maple investors are in agreement with the expected final forms of these orders applicable to them.

The Autorité des marchés financiers ("AMF") previously published final recognition orders with respect to Maple's proposed acquisition of TMX Group and Alpha on May 3, 2012. Maple and TMX Group have been advised that the AMF intends to issue a final recognition order approving Maple's proposed acquisition of CDS. That recognition order is expected to be published shortly, pending final review by Maple and TMX Group.

These recognition orders are the result of a comprehensive and careful review that included public hearings and public comment periods. These recognition orders confirm and enhance the extensive ongoing regulatory oversight by the OSC and by the AMF.

Speaking on behalf of Maple, Luc Bertrand said, "We are very pleased with the strong progress being made to secure the necessary regulatory approvals. We hope to receive the remaining approvals shortly and look forward to beginning the work to implement our vision for a more globally competitive exchange in Canada."

Tom Kloet, Chief Executive Officer, TMX Group said, "We would like to thank the OSC and the AMF for their careful review of these matters. The recognition orders will provide enhanced regulatory oversight and the foundations upon which we will build an efficient and globally competitive exchange group. TMX Group is pleased with the results and is committed to serving Canada's capital markets today and into the future."

Maple today also confirmed that Kevin Sullivan, Deputy Chairman of GMP Capital Inc. ("GMP"), will serve as a nominee to the Maple Board from the independent investment dealer community. The Maple investors believe that Mr. Sullivan's vast experience in perience in the Canadian capital markets and his role with GMP, a leading independent investment dealer, will be of great benefit to the Board going forward. However, in order to satisfy a requirement in the final OSC and AMF recognition orders that the Maple Board include no more than 50% representation from the original Maple shareholder group, GMP has agreed to withdraw from the Maple investor group. GMP's investment in Maple, which represented a less than 1% stake, will be taken up by the other Maple investors, none of whom will own greater than 10% of the company following consummation of the arrangement to follow the completion of the Maple offer.

Regulatory status

Maple's proposed transaction and undertakings are under ongoing review by the British Columbia Securities Commission ("BCSC"), the Alberta Securities Commission ("ASC"), and the Competition Bureau.

As previously disclosed:

The BCSC's public comment period with respect to Maple's proposed acquisition of TMX Group and related transactions closed June 22, 2012. Maple continues to discuss proposed terms for the BCSC's recognition orders for TSX Venture and CDS.

The ASC expects to amend and restate its recognition orders for TSX Venture Exchange and Natural Gas Exchange in accordance with Maple's application, with additional provisions in the Natural Gas Exchange order to address conflicts of interest and subject to its review of the BCSC's proposed recognition order for TSX Venture Exchange.

Competition Bureau staff have previously advised that the Bureau will consider finalized recognition orders before completing its own independent review process. Competition Bureau staff have also previously indicated that the Bureau has provided views and input to the OSC for its consideration relating to the potential impact of the Maple transaction on competition. In that context, Competition Bureau staff advised that it is possible that measures contained in the draft recognition orders, if finalized and enforced, may materially change the regulatory environment such that the Bureau's serious concerns may be substantially mitigated.

Under the support agreement with TMX Group, Maple has agreed to use commercially reasonable efforts to obtain all required regulatory approvals, including from the securities regulatory authorities and the Commissioner of Competition, and to accept all conditions, commitments and undertakings necessary to do so, provided they do not result in a "Material Detriment" as defined in the support agreement. Maple will continue to work to settle the terms and conditions of the remaining recognition orders and to resolve outstanding issues and concerns raised by the AMF, BCSC and ASC and the Commissioner of Competition. However, there can be no assurance that the terms and conditions of the remaining recognition orders will not result in a Material Detriment or that remedies short of a Material Detriment will address the issues and concerns raised by those securities regulatory authorities and the Commissioner of Competition. As a result, there can be no assurance that the required regulatory approvals will be obtained.

Offer to TMX Group shareholders

Maple's offer to acquire a minimum of 70% and a maximum of 80% of the shares of TMX Group for $50 in cash per share is open until 5:00p.m. (Eastern Time) on Tuesday, July 31, 2012, unless further extended or withdrawn. The offer is part of an integrated acquisition transaction, valued at approximately $3.8 billion, to acquire 100% of TMX Group shares. The TMX Group Board of Directors continues to unanimously recommend that shareholders accept and tender their shares under the Maple offer.

As previously disclosed, if all required regulatory approvals are obtained prior to July 31, 2012, Maple expects to be in a position to take up TMX Group shares deposited under the offer on July 31, 2012, subject to the satisfaction of the minimum tender condition and the satisfaction or waiver of the other conditions of the offer. Maple is also seeking to complete the proposed acquisitions of Alpha and CDS concurrently with or as soon as possible following the completion of the Maple offer.

Details of Maple's offer are available in its Offer and Circular dated June 10, 2011, as varied by the Notice of Variation dated June 24, 2011, the Notice of Change and Extension dated August 8, 2011, the Notice of Extension dated September 29, 2011, the Notice of Variation and Extension dated October 31, 2011, the Notice of Extension dated January 31, 2012, the Notice of Extension dated February 24, 2012, the Notice of Extension dated March 30, 2012, the Notice of Change and Extension dated May 3, 2012, and a further Notice of Extension dated May 31, 2012.

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