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Thursday, June 30, 2011

Thomas Kloet TMX Group Inc. (X) CEO is the loser of the losers

While another month is about to end, this is actually very hard to believe. I was very disappointed today when I learned that the TMX Group Inc. (X) had decided to cancel the merger of equals deal. June 30, 2011 was supposed to be the big day, but the TMX Group call it quite one day before, without giving the chance to shareholders to speak their mind about the merger of equals. 

While canceling everything in a move a panic, TMX shows sign of an interior poor leadership. CEO Tom K should resign. The TMX should have gone through this all the way and give shareholders the opportunity to vote for or against the merger of equals. We’ll never know for sure if the deal could have gone through or not. A vote is a vote and has only value once accomplished. It would have been interesting to get the result of the vote. 

By calling it quite, Thomas Kloet and his board are acting like complete losers. And now that the deal with the London Stock Exchange Group had been cancel, Mr. Kloet is now going to study the proposition of the Maple Group while he already said before that the Maple Group proposition wasn’t valuable. So there’s a big contradiction in here. And worst of all, the TMX Group has to pay millions of dollars to the London Stock Exchange Group. 

Knowing that millions have to be paid in case the deal being cancel, the TMX Group should had giving the merger of equals its chance. The TMX Group shouldn’t have cancelled the vote, knowing millions were on the table. This demonstrates a poor leadership and this is not exactly very great for the image of Canada. Did Thomas Kloet got buy somewhere by banks? Would Thomas Kloet had been paid 300 000$ to cancel the merger of equals deal? Does the amount of 300 000$ sound familiar to you? Well, 300k is the amount that Brian Mulroney received in the Airbus Affair.

Here in Canada, financial crimes are not being paid the hard price and see the results. That’s what happening right now. Thomas Kloet is an idiot.


High on dividends said...

CTV News just said that shareholders voted down the deal!

not the company. Where is your source for what you say about the co canceling the deal?

Sunny said...

The vote was supposed to be done today at the meeting! Some shareholders haven't vote yet and were waiting for today meeting to do so. That's why I am saying that they shouldn't have cancel the merger deal one day BEFORE the actual shareholders vote. Some shareholders have vote through proxy over the Internet - but some investors were going to vote on the DAY.

It's not ok to cancel the deal without the vote being completed. Especially knowing that the TMX has to pay millions in penalties to the London Exchange.

For that reason, I think Kloet may had been buy by federal authorities or the Maple Group itself.

Now, the TMX is interesting in the Maple Group, while they had declared before that the maple Group was not a solid proposition.

The Canadian exchange cannot be hold by a mix of Quebec and Canadian institutions - it's not "equal", it's not neutral, it doesn't make a damn sense.

TMX Group is a corruptible group very much losers for canceling today vote at their meeting.

Anonymous said...

The vote has to be 2/3 ( i.e 66%)in favor of the merger to allow it to happen. From there numbers of votes received already against it, they strongly believed it would not get the 66% needed. I do believe the vote should of went ahead regardless as at least you know roughly were the shareholders stand on the issue.

High on Dividends said...

That makes sense.

I guess the TV news just reported the short version...not the whole story. Thanks for clarifying that!

Anonymous said...

It is a shareholder vote not an government election. They already knew the proxy result and usually companies already know how the largest shareholders will vote. There were not enough votes to approve the "merger" so they canceled the agreement.

"TORONTO, June 29, 2011 /CNW/ - TMX Group Inc. has agreed with London Stock Exchange Group plc (LSEG) to terminate their merger agreement.

A majority of shareholder votes cast by proxy prior to the June 28, 2011 proxy cutoff supported the merger resolution; however, it is clear that the two-thirds threshold required to approve the merger would not have been achieved. "

Sunny said...

I understand its not a government vote, but the vote and decision taken is final only at the time of the vote.

they should at least go through the vote and give an ultimate chance to the project to concrete.

I find it stupid by the decision of canceling the vote.

When millions are on the table, they should have to go to the bottom of it and allow the vote.

Not act like chickens in front of the Maple Group.

The only reason why I still hold my TMX shares at this point is to be able to vote against the Maple Group in case another vote is required.

Francis said...

I really don't know how the TMX saga's gonna end. At first, the Maple bid must be approved by authorities, which is far from being done. Even so, the new TMX-Maple would be a very high leveraged company who could not be competitive against those mega marketplaces like NYSE-Deutsche boerse. I'm afraid that TMX-Maple won't be an attractive place for IPO, except for chinesse scams!

Sunny said...

Hi Francis,

Thanks for commenting. I hope the Maple group deal won't move forward. but in the other hand, I won't be sad to received 50$ per stock own of TMX :0)

Francis said...

It's me again! I would like to know if I'm right. Back to Maple. The 50$ bid is not a all-cash deal. 40$ is cash, and the rest consists in shares of the new entity.

My big question is: what is going to do the Dividend Girl? Will she sale the new shares?

I have been so close to jump in the deal, because from one side, 4$ of special dividend for today and international growth for the long term value.

The other side, Maple's bid: a quick gain by trying to tender my shares at 50$

Now that LSE is out, and that I'm really not sure about the approval by regulators, I prefer to stay out, keeping my capital available to flip internet based IPOs, like Zynga, Groupon. And I'll probably buy Lulumon after the split.

Sunny said...

Myself, I made my investment in X back in February 2011, after the merger of equals project had been announced. I had purchased my stocks at less than 42$ each. Deal or no deal - with London or Maple Group - it doesn't change the fact that X is a good investment for the long term. My investment will grow no matter what.

Personally, I don't think the Maple Group deal will work out and I truly hope it won't move forward.

I hope the TMX remains as it is, at less for now. London Exchange may get buy by NASDAQ. In the past, NASDAQ had tried to buy London but they had refused. London was more in need of the TMX that the TMX was in need of London. NASDAQ may acquired London. When completed, NASDAQ could attempt to acquire TMX and than, the acquisition could be completed. It could be what will happen. Anyway, it give an overview of the possibilities.

No matter what happen, TMX remains a good investment - especially at the price I purchase my stocks, very good deal. So for now, I don't move and I plan to hold, no matter if TMX get acquired by Maple or.. NASDAQ? Anyway, seem like NASDAQ preferred London for now. I don't need the cash, I can hold, I can do whatever I want.

IPO don't interest me too much. What I am into however is good established companies willing to pay dividend to hold them for the biz.

Lulumon? I hate that store. I don't think it will last, their success. Need to be quite silly to purchase yoga pants at 50$+ with assorted t-shirt at 50$+... It's a no no for me and a complete non sense. I went to a store once and I don't find anything interesting in there. Everything is tag at very high price all f expensive. And Yoga suck. :)

Francis said...

I agree yoga sucks...and everything is expensive with LLL, even the stock price....that's why I wait the split....and the august 2th limit for us debt celling. You know, people are not like you and I buying stocks: they fall for trends, big tickets brands even just to go at the gym!

My point is growth. Maybe at this point, Lululemon looks expensive. But they are able to grow about 30% at least per year and they just announced 1 billion in revenues for 2012.And a retailler like LLL can go outside of Canada and they are relative small so plenty of room to the sky!

A similar stock: Under Armour. (UA on NYSE) with that, sweat is supposed to evaporate, instead of wetting your t-shirt.

About flipping an IPO: you gain at least 10% the first day of trading. Just a matter of price pressure. And even more. I agree with you LinkedIn is not a great company. But at 9h30, it opened at 83$....2 hours after: 120$. Even if someone had poorly traded, like selling at just 90$, the person had scored in one day, and that fast money can be used to reinvest to buy more dividends.

By the way, some us international stocks pay fat dividends and are more able to grow earnings, to buyback shares and to boost dividend yearly than canadian peers.

Last point: how are performing your mutual funds in your RSP?


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