TORONTO (Reuters) - A critic of plans to take over Canadian exchange operator TMX Group (X.TO) will put out a minority report that opposes recommendations to come from an Ontario legislative panel, raising the prospect that an early step in a complicated review process will approve the deal.
Gilles Bisson, the only member of the left-of-centre New Democratic Party on the Ontario committee, would not comment on the contents of his minority report, or on the conclusions of the majority report.
But Bisson has in the past opposed the proposed C$3 billion (1.8 billion pounds) takeover by the London Stock Exchange, which would create a $7 billion (4 billion pounds) trans-atlantic exchange doing $4 trillion in annual trading, arguing that Canada could lose control of its capital markets to a holding company in London.
“I will be filing a minority report ... but I can’t get into any of the details,” Bisson told Reuters on Friday.
Both reports are due to be made public by April 21.
Ontario, home to the Toronto Stock Exchange and Canada’s financial centre, formed an all-party legislative committee to review the deal soon after it was proposed in February.
The panel’s report will not be binding, but it is expected to carry weight with provincial securities regulators, and with federal government officials, who will have to approve the deal in a multi-layered process that won’t be over for months.
Finance Minister Dwight Duncan said earlier this week that the committee’s recommendations might not be unanimous.
Duncan was an early critic of the takeover, although he has softened his position recently. Other critics, including some of the country’s biggest banks, have said the deal will hurt Canada on the global stage, weaken Toronto’s status as a financial centre, and harm Canadian businesses.
Analysts speculate that if the legislative committee okays the deal, it will be accompanied by certain conditions, likely demanding more clarity over regulatory roles and board control of the new entity, as well as pushing for lower data costs.
The recommendations, originally set to be made public on April 7, are currently being finalized, translated into French and printed.
The Ontario Securities Commission, Canada’s most powerful regulator, has veto power over the deal and other provinces will also have a say.
The federal government must also decide if the takeover is of net benefit to Canada.
The TMX/LSE deal is one of several proposed exchange mergers around the world as major players chase cross-border deals to build scale and cut costs amid increasing competition from alternative trading platforms such as dark pools.
Earlier this week Singapore Exchange Ltd (SGXL.SI) ended its $8 billion bid for ASX Ltd (ASX.AX) after the Australian government formally rejected the offer, saying changes to the country’s financial systems were needed before foreigners could buy the bourse.
It was the first time the Australian government has rejected a major foreign takeover on national interest grounds since 2001.
Additional reporting by Solarina Ho; editing by Janet Guttsman and Rob Wilson