Banking & Finance

Investors Look To Invest In Canadian Stock Exchange (TSX)

XTM eXchange Split Corp. filed it public paperwork this morning. The offering of common shares and Priority Equity Shares is an investment in TXM Group (TSX: X)—a combination of TSX Group, the operator of Canada’s two national stock exchanges, and Montreal Exchange, the Canadian derivatives exchange.

The common shares and the priority equity shares will be $10.00 each. The common shares will offer monthly cash dividends that are targeted at 5.00% per annum. Additionally, any capital appreciation or dividend growth from TXM Group will be provided in the common shares. The Priority Equity Shares will provide fixed, cumulative preferential monthly cash dividends at a yield of 5.25% per annum.   

In December 2007, the TSX Group and the Montreal Exchange combined in a $428 million transaction in which the TSX Group acquired all 15.3 million shares of the Montreal Exchange. The proposed effective date for the combination called the TXM Group was set at May 1, 2008.

Unfortunately, this may be tough for Americans to participate in.

The co-lead underwriters for the prospectus are CIBC World Markets Inc. and RBC Dominion Securities Inc. Additionally, Scotia Capital Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc., TD Securities Inc., Desjardins Securities Inc., Canaccord Capital Corporation, Dundee Securities Corporation, HSBC Securities (Canada) Inc., Raymond James Ltd., Blackmont Capital Inc., and Wellington West Capital Inc. are involved in the offering.

While some of the exchanges have done extremely well while others faltered, it’s probably a safe bet that the interest is going to be present enough for this deal to get a lot of interest globally from Canada alone.

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Jon C. Ogg
May 5, 2008