At least three Canadian financial services companies plan to join the Maple Group's $3.7 billion hostile bid for TMX Group , adding momentum to the made-in-Canada alternative to the London Stock Exchange's friendly offer.

Desjardins Financial Group, GMP Capital Inc , Dundee Capital Markets could announce agreements as early as Tuesday to join the Maple consortium challenging the LSE's $3.5 billion bid for the operator of the Toronto Stock Exchange, a source familiar with the situation said on Tuesday.

The Canadian financial sector is lining up behind the Maple bid, said Laurence Booth, a professor of finance at the University of Toronto's Rotman School of Business.

Bringing more established Canadian financial firms into Maple would bolster the credentials of a bid that has drawn support from those concerned that a TMX-LSE combination would lead to foreign control of Canadian capital markets.

The source, who could not be named because of his company's policy, said one other firm may also join the Maple bid, stressing that the agreements had not yet been finalized.

There will be some new members announced later today, maybe tomorrow, the source said. It might be as early as this afternoon.

Maple Group's current members include four of the country's biggest banks: National Bank of Canada, Canadian Imperial Bank of Commerce , Bank of Nova Scotia and Toronto-Dominion Bank.

Five pension funds have also signed on: Alberta Investment Management Corp, Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, Fonds de solidarite des travailleurs du Quebec (FTQ) and Ontario Teachers' Pension Plan Board.

BOTH BIDS FACE HURDLES

The Maple bid - which hinges partly on regulatory approval of the acquisition of Alpha Group, an alternative stock trading platform, and the CDS stock trade clearinghouse - faces review by Canada's Competition Bureau.

All four banks and one of the pension funds involved in the Maple bid are owners of Alpha, which competes with the Toronto Stock Exchange.

Bringing in more financial firms that are not owners of Alpha and that want low transaction fees may help dispel the antitrust concerns and enhance the prospects for Maple's success, says Rotman School's Booth.

When you've got the pension funds and other people that are just interested in low transaction costs also coming out and saying we agree with this, it sort of diffuses the anti-competitive aspects of the Maple bid.

TMX shareholders are due to vote on the LSE proposal on June 30, and shareholders who spoke to Reuters signaled that the outcome was still uncertain.

The developments in the Maple group are positive and add credibility to the offer, said Ed Ditmire, an analyst at Macquarie Research in New York.

But TMX shareholders are still faced with a tremendous amount of uncertainty when evaluating their choices ... until they get more feedback from regulators, so they'll have to vote their shares really in the dark in regards to that.

The LSE bid must pass muster under the Investment Canada Act, which requires foreign takeovers to carry a net benefit to Canada. Provincial regulators also have a say, but those hurdles are considered less onerous.

News that Maple was close to an agreement on adding members follows a report in The Wall Street Journal late Monday that the consortium was in talks with Desjardins, GMP and Dundee.

If we are on the tipping point of announcing it, it is not only discussions, said the source on Tuesday.

The TMX drama is one of several exchange deals in the spotlight this year, as operators seek consolidation in the face of rising competition. The common thread is a desire to boost their global footprint and broaden their offerings.

(Reporting by Pav Jordan and John McCrank; editing by Frank McGurty)