London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — Merger or Acquisition (June 2011)
21 slides from London Stock Exchange's merger presentation, June 2011
Slide 1: Creating an International Exchange Leader: A Combination that Drives Shareholder Value
TMX Group Inc. and London Stock Exchange Group PLC Join Forces Creating an International Exchange Leader: A Combination that Drives Shareholder Value June 2011
Slide 2: A Combination That Drives Shareholder Value
A Combination That Drives Shareholder Value • Geographic expansion Strategic Diversification • Expanded product array • Revenue synergies Accelerated Growth • Global sales force • Additive customer base • Cost efficiencies Enhanced Operations • Complementary expertise • Successful integration track
Slide 3: Canadian Champion and Global Player
Canadian Champion and Global Player • Global presence and diversified revenue base Geographic Business Mix(1) • Facilitates investment from the world’s largest international capital pool • Potential for lower market impact costs from deeper liquidity and streamlined foreign market access UK Other 2%
Slide 4: Complementary Product Suites Accelerate Growth Prospects
Complementary Product Suites Accelerate Growth Prospects TMX LSEG Combined Global and Large- Cap 9 9 9 Issuer Services Venture / SME 9 9 9 9 9 9 Fully Integrated Service Offering Growth Cash Equities Derivatives 9 9 9 Trading and Post- Trade Services Energy 9 9 9 Cash Fixed Income 9 9 9 Clearing / P
Slide 5: Targeting Substantial Revenue Growth Synergies of C$161m
Targeting Substantial Revenue Growth Synergies of C$161m Priority Opportunities z Enhanced capability to attract foreign listings and facilitate interlisting Stronger positioning: full spectrum from nano- to mega-cap and access to international capital Issuer Services Enhanced liquidity pool G
Slide 6: Additional Revenue Growth Opportunities
Additional Revenue Growth Opportunities Additional Opportunities Not Included in C$161m Cash Fixed z Expand capabilities in B2B (MTS / Shorcan) and B2C (Bondvision / CanDeal) to drive Income volume and revenue growth z Refine and expand strategy for global commodities trading and clearing Energy z E
Slide 7: Cost Efficiencies of C$56m
Cost Efficiencies of C$56m • Targeting annual run-rate cost synergies of £35m (C$56m), phased in over 2 years • Primarily driven by common technology platforms for cash markets IT • Fully deploy SOLA technology across derivatives platforms • Rationalise / consolidate functions and systems Non-IT • R
Slide 8: Enhanced Platform To Drive Superior Financial Results
Enhanced Platform To Drive Superior Financial Results • Assumptions: Illustrative Impact of Full Run-Rate Synergies Figures based on 2012E Street C$ Millions Total EBITDA consensus estimates Increase of 14% (2) $94 $1,207 TMX / LSEG figures include 100% of $56 run-rate net-revenue and cost Repre
Slide 9: Opportunity to Create Long-Term Shareholder Value
Opportunity to Create Long-Term Shareholder Value z Illustrative EPS figures are based on Street research consensus, have not been adopted by TMX or LSEG and are not earnings guidance z Synergy projections are based on 100% of run-rate synergy numbers provided by TMX / LSEG management TMX / LSEG Ill
Slide 10: Maintains Balance Sheet Strength for Future Growth
Maintains Balance Sheet Strength for Future Growth Excludes incremental leverage for acquisitions of Alpha Group and CDS 3.0x 2.9x 2.5x Net Debt / LTM EBITDA 2.3x 2.0x 1.5x 1.1x 1.0x 1.0x 0.7x 0.6x 0.5x 0.4x -- -- -- -- -- -- -- (2) (2) (2) Maple (1) Nasdaq NYSE / DB LSEG TMX / LSEG CME TMX ASX BME
Slide 11: Maintains Ability to Return Capital to Shareholders
Maintains Ability to Return Capital to Shareholders C$108mm share C$285mm share C$30mm share TMX Dividend (C$/share) repurchase repurchase repurchase LSEG Dividend (£/share) $ 2.50 £110mm share £139mm share £52mm share £0.50 repurchase repurchase repurchase Per Share Dividends (1) Special Special Sp
Slide 12: Recognized Value for Performance
Recognized Value for Performance (C$ millions, except as noted) TMX LSEG TMX / LSEG (1) C$1,719 LTM Revenue (2) C$651 C$1,068 Financial Metrics (38% / 62%) LTM Operating C$700 C$281 C$419 Cash Flow (3) (40% / 60%) Domestic Market C$5,965bn C$2,281bn C$3,684bn Capitalization (4) (38% / 62%) Operation
Slide 13: Required Approvals In Process
Required Approvals In Process Key Milestones Key Approvals and Notifications Future Milestones To-Date Investment Canada Act Application Filed April 29 Expiry of the initial 30-day June 7 Canadian Competition Act Competition Act Notification Filed May 6 waiting period Ontario Securities Commission
Slide 14: TMX / LSEG Merger Offers a Defined Path to Required Approvals
TMX / LSEG Merger Offers a Defined Path to Required Approvals TMX / LSEG Recommended Merger Maple Proposal 3 Regulation of exchanges and issuers will not change as a result 8 No public evidence that Regulatory and Securities Commissions of the merger – continued regulation and oversight by OSC, appl
Slide 15: A Combination that Drives Shareholder Value
A Combination that Drives Shareholder Value TMX / LSEG Recommended Merger Maple Proposal 3 Geographic expansion 8 Inadequate information about future business plans Strategic 3 Expanded product array and strategy Diversification 3 Revenue synergies 8 Inadequate information about future business plan
Slide 16: TMX proxies supporting the Merger must be received by June 28, 2011
TMX proxies supporting the Merger must be received no later than 5:00 p.m. (Eastern time) on June 28, 2011 Any questions and requests for assistance may be directed to TMX Group Inc.’s Proxy Solicitation Agent: North American Toll Free Phone: 1-866-793-5697 Paul Malcolmson Paul Froud Local Number: 4
Slide 17: Appendix
TM) Appendix y London 5 Stock Exchange Group
Slide 18: Strong Portfolio of World-Class Global Brands
Strong Portfolio of World-Class Global Brands Global and Large-Cap Issuer Services Venture / SME Cash Equities Derivatives Trading and Post- Energy Trade Cash Fixed Income Post-Trade Information Services Technology Services Increased opportunities for cross-selling and product innovation Note: Busin
Slide 19: Equal Partnership and Global Leadership for Canada
Equal Partnership and Global Leadership for Canada Governance Highlights Joint Headquarters in Toronto and London Balanced Governance • Canadian Chair of the Board • More Canadian resident Board members than any • London-based CEO other constituency • Canadian-based President who manages all global
Slide 20: Forward-Looking Information
FORWARD-LOOKING INFORMATION Certain written and oral statements made by TMX or LSEG or their representatives contain “forward-looking information” (as defined in applicable Canadian securities laws) that is based on expectations, assumptions, estimates, projections and other factors that management
Slide 21: Intellectual Property
INTELLECTUAL PROPERTY AIM, London Stock Exchange, the London Stock Exchange coat of arms device are registered trade marks of London Stock Exchange plc. Main Market is a trade mark of London Stock Exchange plc. Borsa Italiana, the Borsa Italiana logo and IDEM are registered trade marks of Borsa Ital
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