The stock exchanges in London and Toronto will have more to do to convince investors of TMX Group and regulators give the green light to their proposed merger. Nothing is won yet, analysts believe the TD Securities and National Bank Financial.
The offer to shareholders is not that good, "said Doug Young, an analyst at TD Securities. Mr. Young estimated that 75% chance that the merger succeeds. "The premium received by investors remains small, especially since they will likely accept a lower dividend," he notes. The offer is less generous than the one made in similar transactions. These conditions occur while the outlook for TMX Group is improving. "
Investors are not the only ones who have their say. Three Canadian regulatory authorities will have to decide: the Financial Markets Authority (AMF), the Securities Commission of Ontario and Industry Canada, the federal Industry Minister Tony Clement. "Regulatory barriers are high," says Shubha Khan, analyst at National Bank Financial. The approval time is likely to be long, as was the case with other transatlantic mergers, he adds.
The transaction is no less interesting. Mr. Khan evaluate synergy gains to $ 6 per share. However, these gains could be jeopardized if regulators ask for more guarantees.
Both analysts believe it unlikely cons proposal. "Many potential buyers are now in talks to make further mergers, Mr. Khan wrote. Scholarships in Australia and Singapore have begun the process in October. NYSE Euronext and Deutsche Börse have announced their intention day of the announcement of TMX Group.
For now, the title of the company is valued at fair value, according to Mr. Khan. The analyst raises its target of $ 43 to $ 46, but lowered its recommendation from "outperform" to "sector performance."
Mr. Young student, too, its target, up from $ 38 to $ 44. He continues to recommend "hold".