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(Bloomberg) — Toronto Stock Exchange owner TMX Group Ltd. has become the preferred bidder to purchase Cboe Global Markets Inc.’s Australian unit, the Australian Financial Review reported, a deal that would offer some certainty for the future of the country’s second-largest exchange operator.
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TMX has held lengthy talks and spoken with the Australian Securities and Investments Commission, the AFR reported, citing two unidentified sources with knowledge of the matter. Macquarie Capital advised TMX, while Cboe was advised by Barclays, the report said.
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A spokesperson for Cboe Australia declined to comment. TMX didn’t respond to a request for comment outside regular business hours.
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The outlook for Cboe Australia was thrown into question in November when its Chicago-based parent company said it was spinning off its Australian and Canadian businesses. A deal with TMX would help secure its future, although attention will turn to whether the incoming owner will change Cboe Australia’s strategy and how a transition away from Cboe Global’s technical infrastructure will play out.
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The AFR said it is unclear whether TMX was also buying Cboe’s Canadian operations.
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Cboe Australia currently competes with incumbent ASX Ltd. for securities and derivatives trading and handles around 20% of market share for total dollar turnover. It also aims to rival ASX for new listings, with the firm indicating in December that it could launch its market for initial public offerings in 2026.
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A deal could also strengthen Cboe Australia’s status as a challenger to ASX, at a time when the financial regulator is looking to support competition in the nation’s capital markets. ASX is planning to overhaul its strategy after an ASIC review found that its risk management and compliance practices “need to mature.” That review followed years of technical glitches with its aging clearing and settlement platform.
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TMX’s entrance would also make it the second Canadian entity to expand into Australia’s market in the last year, after the Canadian Securities Exchange bought NSX Ltd. in October.
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