The banks and pension funds with a C$3.7 billion hostile offer for the Toronto Stock Exchange touted their offer directly to shareholders on Monday, denying that it would curb competition and urging shareholders to vote for the made-in-Canada solution.

In its formal proposal for the stock market's parent, TMX Group, Maple Group said it was offering C$48 a share in cash for 70 percent of TMX shares, compared with 60 percent in the original proposal nearly a month ago.

That rivals a friendly C$3.5 billion bid from the London Stock Exchange Group, which TMX and LSE heads say different from other proposed Transatlantic exchange tie-ups in that it focuses on growth and building new businesses rather than cost and revenue savings.

Shareholders vote on the LSE-TMX deal on June 30. Maple urged shareholders to vote against that proposal -- Maple's bid dies if TMX shareholders vote for LSE's offer.

TMX Group shareholders should be aware that Maple's offer can only proceed if the LSE take-over plan does not, Luc Bertrand, Maple's chief spokesman and vice-chairman of Quebec-based National Bank, said in a statement.

The takeover battle over TMX Group is part of a wave of attempts at consolidation sweeping the world's top exchanges. Singapore Exchange (SGX) Ltd's kicked things off last year with a failed attempt to buy Australian market operator ASX Ltd.

Maple comprises four Canadian leading banks, five top pension funds and four new institutional investors.

The C$3.7 billion price is based on C$48 multiplied by the number of fully diluted shares, Maple said. A previous C$3.6 billion value was calculated based on the number of basic shares outstanding.

Unlike LSE shareholders, TMX investors do not get a second vote if there are conditions attached to any regulatory approvals that may come after June 30.

In its circular, Maple said its bid offers cash to shareholders and would maintain TMX's current dividend. It disputed the line from the LSE/TMX partnership that the transatlantic tie-up would enhance liquidity for Canadian capital markets.

LSE's planned takeover must pass muster with the Canadian government, which will decide if it meets the terms of the Investment Canada Act, which says foreign takeovers must carry a net benefit to Canada.

We think we're in quite good shape now, TMX Chief Executive Tom Kloet said on Friday, noting that the company was in active dialogue with the government over the deal.


Maple said on Monday it would maintain the current CEO and senior management at the TMX as well as existing commitments regarding TMX's board.

It listed a slate of directors that includes Bertrand as well as political and financial heavy hitters like CIBC senior executive vice-president and vice chairman Jim Prentice, who held key government posts like Minister of Industry until the start of this year.

One issue concerning shareholders has been the valuation of Alpha Group, Canada's main alternative trading platform and the CDS clearinghouse -- entities Maple says will be wrapped into the TMX Group as part of the deal.

Maple gave no price for the entities, but said it would form a special committee to reach a fair value.

Maple's deal would give it control of some 80 percent of Canadian stock trading by volume, making a review by competition authorities all the more important.

The group, whose four banks and one of the pension funds are owners of Alpha, said in its circular that the Alpha and CDSL transactions would benefit Canadian capital markets and not affect the competitive market for equities trading.

It said its own investors would sell their interests in Alpha and CDSL at whatever prices the committee recommends.

Maple Group added Desjardins Financial Group, GMP Capital Inc, Dundee Capital Markets and Manulife Financial to their ranks on Sunday.

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

The pension funds are 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.

(Additional reporting by Pav Jordan and Euan Rocha; editing by Janet Guttsman)