The battle for control of TMX has intensified after rival bidder Maple Group increased its bid in an attempt to derail the Canadian market's tie-up with the London Stock Exchange (LSE).
Yet, the LSE and TMX's proposed merger was bolstered yesterday after the world's largest proxy shareholder came out in favour of the deal.
Late on Wednesday, Maple Group, a consortium of 13 Canadian financial companies, upped the terms of its hostile bid to C$3.8bn (£2.4bn) from about C$3.7bn.
A spokesman for the consortium said: "Maple's offer continues to provide far greater value and certainty than the LSE takeover, as well as a stronger, more valuable and more sustainable business model for the TMX Group."
TMX said it would review Maple's new bid but would make no further public statement until the offer had been fully analysed.
News of the approach came just hours after the LSE and TMX revealed they were to offer a £416m sweetener to shareholders to persuade them to back the deal.
One insider at the UK stock market group said the company had "listened to shareholders and done what was necessary".
Luc Bertrand of Maple said: "The LSE proposes to return a bit of cash to shareholders but hasn't changed the fundamental value of its offer. There is no doubt that our offer is superior to the LSE takeover and we continue to be prepared to engage in discussions with the TMX board."
This comes as a second major proxy adviser threw its weight behind the exchange tie-up, saying there was "little incentive" for investors to accept Maple's offer. ISS Proxy Advisory Services said: "We recommend shareholders take the bird in the hand and vote for the proposed merger of equals with the LSE." This followed support from Glass Lewis this month.
It pointed out that the company would be saddled with a much heavier debt burden of 2.9 times net debt to earnings before interest, taxation, depreciation and amortisation if investors backed Maple. Under the LSE deal, the leverage would be half that.
"Shareholders should first recognise the clear implications of the ongoing game of musical chairs among exchanges globally," ISS said. "Strategic combination – particularly if, beyond merely delivering scale, it generates product innovation and defensible positions in an evolving market – may well be the competitive imperative for all exchanges."
The LSE agreed a deal in February, but Maple tabled a rival offer soon after. TMX said the second offer "did not constitute a superior proposal, nor could it reasonably be expected to result in a superior proposal".