LSE, TMX stop their merger, leaving that game (Reuters)

TORONTO/LONDON (Reuters)-plan C $ 3.6 billion (3.7 billion dollars) The London Stock Exchange to buy its counterpart in Toronto collapsed Wednesday in the face of competing bid, led by Canadian banks, leaving the UK itself vulnerable to capture.

The failure, which follows the abandoned supply Singapore Exchange Ltd for Australia ASX Ltd, is the latest sign of nationalist pride for cross-border deals frustrating capital markets highly symbolic.

The bid failed LSE opens the door to a hostile C $ 3.8 billion for TMX Group, operator of Toronto Stock Exchange, the Maple Group Consortium. The Consortium is an alternative to Canada for an acquisition that would put a big well pet in foreign hands.

"This is a group of Canadian companies that came together and stated that themselves," said Dwight Duncan, Minister of Finance of the province of Ontario and an early opponent of the deal LSE.

Having to withdraw from Canada, LSE calls attention to itself as a target TAKEOVER as exchanges consolidate to try to grow and broaden the geographical scope and battle rivals and new entrants to the market.

NASDAQ OMX Group, smarting from their failure in the United States to buy the New York Stock Exchange parent NYSE Euronext, would be a contender for an alternative combination ocean liner with the LSE.

"While the deal failed probably puts a stop to the ambitions of TMX M &, other Exchange operators probably will continue to seek partners. This strengthens my conviction that we should expect more mergers, not less, "said Ditmire, And New York-based analyst for Macquarie Securities.

NASDAQ and LSE shares rose in late trade on Wednesday, indicating that speculation about a tie-up might be brewing.

"It wouldn't surprise me to see the Nasdaq and LSE talking," said Jamie Selway, New York-based market structure expert and Managing Director of investment Technology Group strategy.

The collapse of the deal TMX is a black eye for LSE Chief Executive Xavier Rolet, who staked his reputation on sealing the deal.

Should have brought a Rolet group exchange LSE-TMX, which would be a global player in the heavyweight and no. 1 in listing energy and mining companies.

But the support they got from TMX and Council was not sufficient to overcome opposition within the banking industry Canada's tight-knit.

Four of the largest banks in the country were players lead the offer from Maple, a consortium that included pension funds and financial services company. The other two large banks of Canada were consultants to the LSE proposal.

NOT ENOUGH VOTES

In short statements issued a day before a shareholder vote, the two exchanges said that they realized by an early count of proxy votes that shareholders would not give them the TMX by a two thirds majority needed to approve their agreement.

TMX Group said it would now examine opportunities, including the supply of Maple.

"LSE and TMX were both in positions where they were not large enough or enough diverse and rapidly growing enough to control their own destiny," said Justin Schack, CEO of analysis of the market structure of agency brokerage Rosenblatt securities in New York.

"They made the best deal they could probably. Now that TMX is not going to happen, Maple has while LSE is again on its own, and there are many partners out there where it might be the buyer, rather than the destination. "

Maple has offered c $ 3.8 billion for TMX, mainly in cash.

Offer mostly Commons of LSE was worth approximately C $ 49 a share.

It would have needed a green light from a Government which last year vetoed a big international acquisition as not being in the best interests of Canada.

TMX shares touched a high of C $ 44.80 after the deal was scrapped before easing back to close at C $ 44.20. That is well below the price of a share C $ 50 Maple.

Maple wants to wrap the alternative Canada's largest, Alpha, trading venue and the compensating stock-trading CDS to a post-takeover TMX. That would give it a market share of more than 80 percent and leave you facing antitrust problems.

"Now we need to see what he thinks of the Bureau of competition of Maple. We also need to see if shareholders support Maple. I think they will do, that I don't see how not, "said Alison Crosthwait, Director of global strategy of trading in Instinet.

"We're going back to more of a closely held and interested parties control the trade."

Competition Bureau of Canada has independent bared its teeth lately on many fronts, getting paid C $ 10 million from Bell Canada to Bce Inc. for misleading advertising and trying to block a joint venture between Air Canada and Continental United.

(Additional Reporting by Claire Sibonney, Andrea Hopkins, Euan Rocha, he Solarina, Jonathan Spicer, Allison Martell and Trish Nixon; editing by Janet Guttsman and Peter Galloway)

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