A proposal by a group of Canadian banks and pension funds to take over the operator of the Toronto Stock Exchange offers cost savings and opportunities for international growth, the group said on Monday.

A consortium calling itself the Maple Group Acquisition Corp is proposing a C$3.6 billion ($3.7 billion) deal to buy TMX Group, aiming to derail a $3 billion friendly bid for the exchange operator from the London Stock Exchange.

It presents a clear path to creating additional value by optimizing the balance sheet, margin expansion, improved multiple potential and the ability to pursue international growth opportunities, said Luc Bertrand, the vice-chairman of National Bank of Canada, one of the banks involved in the deal.

LSE and TMX have also touted their deal, announced in February, as creating a more diversified and international company.

Their proposed combination has raised concerns in Canada about a national institution falling under control of a foreign-based company.

Maple Group said its proposal would not require approval under the Investment Canada Act, which requires proof that the merger would be of net benefit to Canada. Such reviews only apply to deals involving foreign companies.

The consortium also said its proposal was not comparable to the Nasdaq and IntercontinentalExchange's bid for NYSE.

Nasdaq and ICE ditched their $11 billion offer for NYSE Euronext citing antitrust concerns, highlighting the fragility of dealmaking in the closely regulated exchanges industry as pressure to consolidate mounts.

They are very, very different. First, the primary antitrust concerns around Nasdaq/NYSE appear to have been around listings. Alpha does not currently offer listings, said Bertrand.

Shares of TMX surged 6.6 percent in early trade on Monday to C$44.42.

(Reporting by Pav Jordan and Solarina Ho; Editing by Frank McGurty)

Canada