Friday, June 19, 1998
This from the Financial Post
<Picture: BREAKING NEWS>
Takeover speculation envelops Midland Walwyn
ÿTORONTO (Reuters) - Canada's Midland Walwyn Inc. closed out the week Friday with its stock at record high and rumors swirling that a takeover offer was in the works for the country's last major independent brokerage.
ÿ But the company has so far declined to publicly address the speculation, and took the unusual step Friday of rejecting a request by the Toronto Stock Exchange for a comment on the issue.
ÿ Canada's largest and most influential stock exchange issued issued a terse statement on the matter at the close of trading on Friday.
ÿ "In the view of the rumors in the marketplace regarding Midland Walwyn Inc., the Toronto Stock Exchange has requested the company issue a public statement. The company has declined to comment," the TSE said.
ÿ Rumors of an imminent takeover bid for Midland by Merrill Lynch & Co. Inc. drove the shares to record highs on Friday.
ÿ Bay Street -- Toronto's main financial district -- has been rife with rumors about a possible bid for Midland by Merrill. One trader said some Midland employees had been jokingly answering their telephones "Merrill Lynch" and there had been unconfirmed sightings of Merrill executives in Midland's offices.
ÿ Both Midland and Merrill have declined to comment on speculation about a bid since June 10 when rumors first started to drive Midland's share price higher.
ÿ Midland spokesman Peter Kahnert told Reuters again late Friday that it could not comment on the speculation because it has a policy of not commenting on rumors. Kahnert also said he could not comment on Midland's decision to turn down the TSE request for information.
ÿ TSE spokesman Steve Kee said he does not think this was the first time a company has declined to comment in response to a request from the exchange. But the move is seen by some veteran market watchers as unusual.
ÿ "It doesn't happen a lot of times, particularly, of course, since Midland Walwyn are members of the Toronto Stock Exchange, it looks a little different. My suspicion arises when I see a comment like that. If they wanted to say there was nothing to it and if there was nothing to this, it seems to me they would say so. If there's anything to it, maybe they're not ready to say anything," said Fred Ketchen, director of equity trading at ScotiaMcLeod Inc. and the former chairman of the TSE.
ÿ "The name Merrill Lynch pops up but then you can't discount CT Financial (Services Inc.) or Power Corp. of Canada ," he added.
ÿ CT Financial, holding company of Canada Trust and a majority-owned unit of Imasco Ltd. , has also been cited as a possible Midland suitor.
ÿ Midland's stock closed up C$1.25 to C$27.25 on Toronto Stock Exchange trading of 786,895 shares Friday. Earlier, the stock touched a record all-time high of C$28.00. The volumes were among the heaviest the stock has seen since the speculation first surfaced.
ÿ Midland has been the subject of takeover speculation for years because of its unique position in the industry. Except for it, all of the country's major brokerages have been gobbled up by Canada Big Six banks following a change of rules earlier this decade that allowed banks to enter the brokerage industry.
ÿ ($1-$1.47 Canadian)
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