Tag: Luc Bertrand

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A Canadian Offensive

Summary

The Maple consortium of large Canadian banks led by the best Canadian Exchange Manager, Luc Bertrand, is likely to acquire the Canadian exchange TMX. The London Stock Exchange looks unlikely to be able to win the prize against a very strong bid.

Analysis

For outsiders, it was a strange day in Canadian markets when the board of TMX overlooked their Deputy CEO Luc Bertrand and chose an outsider, Tom Kloet as CEO in 2008.

As the CEO who took the Bourse de Montreal from unloved also ran to a 1.3 billion Canadian dollar franchise, there was widespread shock that Bertrand did not get the top job at TMX.

Three years on and Luc Bertrand has returned to centre stage as the head of the Maple group bid and already the bid appears to be building remarkable momentum.

The price offered is strong and includes a judicious quantity of cash for existing shareholders. The concept of building a silo for Canada ought to help strengthen the Canadian market infrastructure (although it is, admittedly somewhat controversial) and ultimately TMX would gain a top manager who has a proven track record of transforming exchange businesses.

LSE look to have been simply outplayed by a bid which while all Canadian is not protectionist per se although the nationalist issues will probably do Maple no harm in their pursuit of the exchange.

A revamped TMX with Luc Bertrand at the helm promises great things for the Canadian markets and indeed may be influential on market events overseas. Will it push LSE in to negotiations with NASDAQ? That seems logical although it is tricky to see which side will be willing to give ground in what could be a relatively complex deal to complete for political more than operational reasons.

 

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TMX: Bertrand Departs – another Shock departure of a Successful Manager

Summary

Luc Bertrand standing down as the head of M-X and deputy at Toronto SE is a shock move given that it was Bertrand’s success at M-X that helped rejuvenate the Canadian exchanges in the first place!

Analysis

A decade ago the directors of the Toronto Stock Exchange thought they had pulled a smart move by trading the rights for derivatives trading in all of Canada against the stock trading activity of the Montreal Exchange. They even paid a 40 million CAD bounty for the privilege. There would be a ten year period during which neither party could transgress into the products of the other.

With the money and the rights to trade all listed Canadian derivatives, Montreal’s new CEO Luc Bertrand set about closing his floor and making the Bourse de Montreal a copy book example of exchange transition during the Capital Market Revolution. From a minor provincial outpost, he managed to transform the volumes and profitability of the Montreal Exchange so that by December 2007 theresultant merger of both markets was a 1.3 billion CAD deal.

Bertrand had not only revoutionised the exchange and created his own IT subsidiary during this time, he had also helped found the Boston Options Exchange (BOX) which has become a successful niche player in the US equity options market.

Nevertheless, the Toronto board remained hostile to having the visionary Bertrand as CEO of the entire group. Certainly, it must have been embarrassing paying hundreds of millions of dollars for an asset that the TSE board had deemed less then worthless 8 years earlier!

Even when CEO Richard Nesbitt resigned in 2008, the Toronto board still could not stomach Luc Bertrand as CEO and thus they brought in ex-Singapore Exchange CEO Tom Kloet from Chicago to run the company instead.

After what has been a rather stormy period for internal management, Bertrand has clearly decided to take his leave. This is all the more interesting as Luc himself remains the largest individual shareholder in the business with more than 1.5% of the shares.

While Tom Kloet is a safe pair of hands for the group, it has to be said that Luc Bertrand’s departure from TMX is an sad moment for not just the exchange but also a man with a strong reputation as not merely a visionary but also one who could make his visionary plans succeed.

Hopefully it will not be long before an exchange seeking a new direction will seek to utilise this most amiable Canadian as their new CEO.