(May 1 – 16:40 ET) – The Toronto Stock Exchange and the Canadian Venture Exchange have signed an acquisition agreement for CDNX to become a wholly owned subsidiary of the TSE. The deal remains subject to a shareholder vote and receipt of regulatory approvals.

The agreement is consistent with the terms laid out in the initial offer from the TSE that would see the two exchanges remain distinct with the senior market being operated by the TSE and the public venture market continuing to be operated by CDNX. The TSE will pay $50 million ,or almost $382,000 for each of the 131 outstanding shares of CDNX.

Under the agreement, the two exchanges would share one common board of directors. The shared board will include the following five current CDNX directors:

  • Scott Paterson, current CDNX chairman;
  • Bill Hess, current CDNX president and CEO;
  • Ian Brown, CDNX vice chairman; and
  • John Hagg and Harry Jaako, current CDNX board members.

Bill Hess will continue as president of CDNX reporting to TSE president Barbara Stymiest. Scott Paterson will become a vice chair of the TSE board of directors.

The deal also calls for the creation of a CDNX advisory board to the TSE, which will include members who have expertise in and will advise on policy matters relating to the public venture capital market and the role of CDNX.

The initial advisory board members are: Advisory Board Chair Ian Brown; John Brock; Sesto DeLuca; Richard Groome; John McCoach; Norman Thompson; Derrick Armstrong; Charlotte Bell; Peter Brown, Bruce McLeod, Bruce Ramsay and Paul Stein. The chair and the president and CEO of the TSE and the CDNX president will be ex-officio members. It is expected that the advisory board will be expanded.

The local offices of CDNX in Vancouver, Winnipeg and Toronto will be maintained with the head office remaining in Calgary. The TSE also plans to open offices in Calgary and Vancouver.

CDNX will hold its annual general and special shareholders’ meeting to consider the agreement. The meeting will take place in Calgary. The TSE also will hold its annual general meeting the same day in Toronto at which shareholders will vote on the changes necessary to complete the transaction.