TSE AND CDNX REACH AGREEMENT IN PRINCIPLE
MARCH 28, 2001 (TORONTO and CALGARY) --The Toronto Stock Exchange (TSE) and the Canadian Venture Exchange
(CDNX) have agreed in principle to a transaction that would see the TSE acquire CDNX.
Its expected that the transaction will go to CDNX member-shareholders for a final
vote by July 1.
Under the terms of the deal, the two capital markets will
remain distinct with CDNX continuing to operate as a separate exchange, but as a wholly
owned subsidiary of the TSE. The offer will see the TSE pay approximately $382,000 for
each of the 131 outstanding shares of CDNX. This translates to a deal of $50 million.
TSE president and CEO Barbara Stymiest said, "This
combination helps the Canadian capital markets as a whole. Listed companies and brokerage
firms of both exchanges will benefit from reduced costs, improved efficiencies and a
stronger presence in key regional centres right across Canada." She added: "Our
business will bring a unified approach to issuers, helping a company through each stage of
its growth. The TSEs relationships with institutions and its international profile
will immediately provide valuable exposure for Canadian venture companies."
The local offices of CDNX in Vancouver, Winnipeg and
Toronto will be maintained with the head office remaining in Calgary, to ensure the
appropriate level of expertise is in place in the venture market to continue to expand on
its success. Adding TSE expertise to these important local offices also allows for the
extension of services and better assists prospective, existing and graduating companies.
"This is a significant step in the continued growth of
the public venture capital market in Canada," said CDNX President and CEO, Bill Hess.
"The benefits to CDNX-listed companies and the venture market as a whole is greater
liquidity, a clear graduation path to the senior exchange and enhanced visibility."
The agreement in principle consists of the two exchanges
having a common Board of Directors, which will include five current CDNX directors. There
will also be a CDNX advisory board to the TSE whose members have expertise in the venture
capital market. This board will advise on issues affecting companies listed on CDNX. G.
Scott Paterson, current Chairman of the CDNX Board, will chair the advisory board for
CDNX. Paterson will become a Vice-Chairman of the TSE Board of Directors.
G. Scott Paterson and Dan Sullivan, Chairman of the Board
for the TSE, both hailed the deal. "This transaction ensures a strong domestic
business able to compete in an increasingly global marketplace," said Sullivan, while
Paterson commented: "It strengthens the Canadian capital markets while retaining all
the unique attributes of both the junior and senior markets."
It is expected the deal will take four to six months to
complete and is subject to formal approval, CDNX member-shareholders approval and
regulatory approval.
The Toronto Stock Exchange consistently
ranks among the worlds top exchanges by market capitalization and trading volume. In
2000, it was the TSE's best trading year ever as the average daily value topped $3.75
billion. The TSE provides investors with a well-regulated, fair and accessible
marketplace. |