Four more financial institutions have joined Maple Group Acquisition Corp's plan to mount a hostile bid for the TMX Group and top a friendly offer from the London Stock Exchange Group , the consortium of Canadian banks and pension funds said on Sunday.

Desjardins Financial Group, GMP Capital Inc , Dundee Capital Markets and Manulife Financial have agreed to join Maple's C$3.6 billion ($3.7 billion) bid for the operator of Canada's main bourse.

Maple Group, which takes its name from Canada's patriotic maple leaf symbol, says its offer is financially superior to the roughly US$3.4 billion all-stock bid from the London exchange and would keep ownership of the TMX within the country's borders.

The new partners would own 7 percent of the new entity, while the original pension funds' share would be reduced to 31 percent from 35 percent. The original banks' ownership would be cut to 22 percent from 25 percent. TMX Group investors would still own 40 percent.

Maple's original bank members are Toronto Dominion Bank, Canadian Imperial Bank of Commerce , National Bank of Canada and the Bank of Nova Scotia .

Five pension funds also form part of the original group: Alberta Investment Management Corp, Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, Fonds de solidarite des travailleurs du Quebec (FTQ) and Ontario Teachers' Pension Plan Board.

Maple, which is expected to take its hostile bid to TMX shareholders any day now, has less than three weeks to convince investors its all-Canadian alternative is better for the country's capital markets. Shareholders will vote on the TMX-LSE deal on June 30.

Maple's new partners also tout what they see as the benefits of Maple's proposal to Canada's small- and mid-cap companies and to Montreal, Quebec, home to TMX's Montreal Exchange for derivatives.

We believe Maple's vision ... includes a real commitment to further Montreal's position as a center of financial excellence, Monique Leroux, chief executive of Desjardins, Canada's largest cooperative financial group, said in a statement.

With a number of Maple members based in the French-speaking province and Luc Bertrand, vice-chairman of Quebec-based National Bank, acting as Maple's chief spokesman, Quebec may prove influential.

The Maple bid -- which partly hinges on regulatory approval of the acquisition of Alpha Group, Canada's leading alternative trading system, and the CDS clearinghouse -- will face antitrust scrutiny, as the Alpha/CDS component of the proposal would give the new entity a big share of the Canadian market.

Six of the 13 Maple members are owners of Alpha, which competes with TMX's Toronto Stock Exchange. Integrating Alpha would give TMX more than 80 percent of the trading market.


Investors who spoke to Reuters in a recent poll signaled that the outcome remained uncertain, with many hoping Maple's circular would provide more details on its bid.

Last week, Alpha chief executive Jos Schmitt told Reuters that additional Maple members would demonstrate a show of support to investors, a sentiment previously expressed by others.

Not everyone is convinced, however.

It's two steps forward and five steps back, said Renee Colyer, chief executive of markets consultancy Forefactor, adding that should the Maple deal go through, it would create another monopoly market with too many conflicts to count.

I knew they'd bring in others -- they have to. They are trying to reduce the conflict of interest by bringing in more players, increase the dollar amount they have to change the deal and demonstrate to the government how many firms want Canada to be a closed market.

While Maple faces Canada's Competition Bureau, the LSE bid must win approval under the Investment Canada Act, which requires foreign takeovers to provide a net benefit to Canada. Provincial regulators also have a say, but those hurdles are considered less onerous.

The LSE offer price is based on the exchange's closing price on Friday.

(Additional reporting by Allan Dowd in Vancouver; Editing by Dale Hudson)