This week is supposed to be crunch time in Canada as

investors in the

href="http://www.tmx.com/" target="_blank">TMX Group

vote either to throw their lot in with the

href="http://www.londonstockexchange.com/"

target="_blank">London Stock Exchange or retrench

within their national borders and develop as the Maple Group. An

article in the

href="http://www.ft.com/home/uk" target="_blank">Financial

Times today questioned whether either deal was actually

a good one. On the one hand

href="http://www.cbc.ca/news/business/story/2011/06/22/lse-tmx-tsx.html"

target="_blank">the Maple Group deal looks

challenging as the new entity would end up with very high levels

of debt and so could be restricted in its strategic options

moving forward. On the other hand, the rhetoric coming out of

Paternoster Square doesn't seem to focus on real cost or clearing

synergies but, instead, highlights the benefits of becoming a

listing powerhouse for mining and natural resource stocks. Put

like that you can see why maybe neither offer is enough to set

the pulse racing but is the "do nothing"

option a realistic one and will a better deal come along for

either party in the foreseeable future?

Both

the

href="http://www.londonstockexchange.com/home/homepage.htm"

target="_blank">LSE and the Toronto Stock Exchange

(TSX) have seen their domestic market share suffer and both are

in that awkward middle ground of being neither niche nor a real

super power. This is made worse by the fact that exchanges simply

cannot hold back the globalisation of capital markets and exist

within a vacuum. On these grounds alone the Maple Group bid looks

to be on shaky ground especially as, post-deal, it would lack the

financial firepower to be a real consolidator outside of

Canada.

So, should

href="http://www.tmx.com/" target="_blank">TMX

consummate its relationship with London or sit back and see if a

better deal comes along? The

href="http://www.londonstockexchange.com/home/homepage.htm"

target="_blank">LSE has come a long way since it

woke up and met the challenges of the post-MiFID landscape. Right

now, its blue chip equities volume is about five times that of

the TSX and the combined group would certainly have the volume,

prestige and financial power to become a real global

player.

Nevertheless, it looks like it will

still go to the wire but the clincher for me is that if the Maple

Group option is such a good thing how come it took a bid from the

href="http://www.londonstockexchange.com/home/homepage.htm"

target="_blank">LSE to bring it out into the

open?