TMX-LSE merger needs a facelift already

TMX-LSE merger needs a facelift already

Only weeks old, the proposed merger of the Toronto Stock Exchange and the London Stock Exchange has been badly chapped by the chilly reception it’s gotten from both government and business circles. So the proponents of the merger are doing what everyone with that kind of money does when appearances start to fade: makeover! According to The Globe and Mail, the PR push to make this merger look spiffier for Canadians is already underway.

Among the first changes: Sources say the two sides will stop referring to the $7-billion union as a “merger of equals,” a phrase that executives from both firms have repeated like a mantra whenever questions came up about whether Canada was losing control of TMX.

Instead of defusing the questions, the merger-of-equals label had become a lightning rod for politicians and some opponents. Skeptics seized on it every time to point out that TMX would be a slightly junior partner in the deal with one fewer board seat than LSE, which would also get the chief executive officer role.

And at this point, the success or failure of the deal will turn on communication.

There’s sufficient money behind this push that we don’t expect the parties to give up even if this latest PR offensive fails. Billions with a B is a lot of money, after all. But with Ontario’s government in a bit of an election-year panic, if this starts to look toxic for Queen’s Park, they could, all on their own, pull the plug on this merger. Does Dwight Duncan want the opportunity to thump a podium and speechify about protecting “a key Canadian asset for competitiveness in the 21st century” or something like that? What finance minister in an election year wouldn’t?

• ‘Merger of equals’ axed in TMX-LSE deal [Globe and Mail]