Lobbyist hired by TMX Group is same man BHP used in failed bid for Potash

The head of the Toronto Stock Exchange insists the proposed merger with the London Stock Exchange is different from last year’s hostile takeover battle for Potash Corp. of Saskatchewan Inc. But there is one similarity – TMX Group is using the same lobbyist BHP Billiton Ltd. hired for its failed quest for Potash Corp.

More related to this storyOntario’s Finance Minister challenges proposed TMX-LSE mergerThe LSE-TMX revenue synergies explainedA merger that will only bring mediocrity

AudioTMX CEO Tom Kloet on strategic assets and the benefits of merging with the LSE Download this file (.mp3)Video The foreign ownership debate

Federal records show TMX hired Michael Coates, the chief executive of Hill and Knowlton Canada, as a lobbyist two days before the company announced a proposed merger with the LSE on Feb. 9. Mr. Coates also recently registered as a lobbyist for TMX in Ontario, where the provincial government can veto the transaction. Both registrations indicate he will be working to win government approval of the merger. He doesn’t appear to be registered in Quebec, which can also veto the deal.

Mr. Coates played a similar role for BHP at the federal level with less-than-stellar results. Many observers say BHP officials badly misread the political climate, sent mixed signals about their intentions and failed to respond adequately when Saskatchewan Premier Brad Wall started vigorously opposing the takeover. In the end, Industry Minister Tony Clement blocked the bid last November, announcing it had no “net benefits” for Canada.

Mr. Coates and BHP chief executive Marius Kloppers certainly made the rounds in Ottawa trying to win support for the takeover. Records show they contacted more than two dozen members of Parliament, including Finance Minister Jim Flaherty, as well as an assortment of government officials. But those meetings didn’t start until late September, records show, more than a month after BHP launched its offer and long after opposition to it started to mount.

Mr. Coates has deep Conservative roots, working in the past as a political aide and a Conservative Party official. During the 2008 election campaign, The Globe and Mail reported that he was acting as a senior representative of the Conservative Party while registered to lobby the Prime Minister's Office on behalf of four major corporations.

Mr. Clement is now reviewing the TMX-LSE merger proposal, while Ontario and Quebec plan to hold public hearings. TMX spokeswoman Carolyn Quick declined to comment on why the company hired Mr. Coates, other than to say “we are pleased to be working with them.” Mr. Coates also declined comment.

On a blog posting last month, Mr. Coates offered some tips for companies considering a merger after the Potash decision. One of his comments could prove telling, given the Ontario government’s growing hostility to the TMX deal: “The federal government is in a minority Parliament and won’t risk its popularity on a commercial transaction if the province is offside. Their support or neutrality is key.”

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Lobbyist hired by TMX Group is same man BHP used in failed bid for Potash

The head of the Toronto Stock Exchange insists the proposed merger with the London Stock Exchange is different from last year’s hostile takeover battle for Potash Corp. of Saskatchewan Inc. But there is one similarity – TMX Group is using the same lobbyist BHP Billiton Ltd. hired for its failed quest for Potash Corp.

More related to this storyOntario’s Finance Minister challenges proposed TMX-LSE mergerThe LSE-TMX revenue synergies explainedA merger that will only bring mediocrity

AudioTMX CEO Tom Kloet on strategic assets and the benefits of merging with the LSE Download this file (.mp3)Video The foreign ownership debate

Federal records show TMX hired Michael Coates, the chief executive of Hill and Knowlton Canada, as a lobbyist two days before the company announced a proposed merger with the LSE on Feb. 9. Mr. Coates also recently registered as a lobbyist for TMX in Ontario, where the provincial government can veto the transaction. Both registrations indicate he will be working to win government approval of the merger. He doesn’t appear to be registered in Quebec, which can also veto the deal.

Mr. Coates played a similar role for BHP at the federal level with less-than-stellar results. Many observers say BHP officials badly misread the political climate, sent mixed signals about their intentions and failed to respond adequately when Saskatchewan Premier Brad Wall started vigorously opposing the takeover. In the end, Industry Minister Tony Clement blocked the bid last November, announcing it had no “net benefits” for Canada.

Mr. Coates and BHP chief executive Marius Kloppers certainly made the rounds in Ottawa trying to win support for the takeover. Records show they contacted more than two dozen members of Parliament, including Finance Minister Jim Flaherty, as well as an assortment of government officials. But those meetings didn’t start until late September, records show, more than a month after BHP launched its offer and long after opposition to it started to mount.

Mr. Coates has deep Conservative roots, working in the past as a political aide and a Conservative Party official. During the 2008 election campaign, The Globe and Mail reported that he was acting as a senior representative of the Conservative Party while registered to lobby the Prime Minister's Office on behalf of four major corporations.

Mr. Clement is now reviewing the TMX-LSE merger proposal, while Ontario and Quebec plan to hold public hearings. TMX spokeswoman Carolyn Quick declined to comment on why the company hired Mr. Coates, other than to say “we are pleased to be working with them.” Mr. Coates also declined comment.

On a blog posting last month, Mr. Coates offered some tips for companies considering a merger after the Potash decision. One of his comments could prove telling, given the Ontario government’s growing hostility to the TMX deal: “The federal government is in a minority Parliament and won’t risk its popularity on a commercial transaction if the province is offside. Their support or neutrality is key.”

Read more >>