Rival bid threatens LSE's Toronto merger plan

Plans for a £4 billion merger between the London Stock Exchange (LSE) and its Toronto counterpart are under threat from a rival bid.

Maple Group, which is made up of Canadian pension funds and banks, has tabled a 1.8bn bid for the owner of the Toronto exchange, TMX Group, in a move that would keep it in Canadian hands.

The LSE unveiled its merger with TMX in February as part of chief executive Xavier Rolet's desire to play a central role in the consolidation of international stock exchanges. However, the deal has drawn opposition in Canada, amid concerns its biggest exchange will be dominated by foreign interests.

TMX has said it will assess the higher offer from Maple but that in the meantime it remained committed to its existing merger partner.

The failure of the LSE to complete the deal could make it a bid target as exchanges look to slash costs and attract the biggest company listings.

Germany's Deutsche Borse agreed in February to buy NYSE Euronext, but the deal is subject to a counterbid from Nasdaq OMX and IntercontinentalExchange. The Australian government recently blocked Singapore's takeover bid for its bourse on national interest grounds.

The LSE's deal with Canada's TMX would create one of the world's biggest trading platforms, with the new business becoming a dominant player for mining company listings at a time of strong commodity prices.