TORONTO - The head of the TMX Group (TSX:X) says the stock market operator has spoken with a number of large shareholders and it's confident that the proposed merger with the London Stock Exchange Group will be approved.

"Many of our shareholders are very supportive of the proposal of the arrangement with the LSE Group," TMX chief executive Thomas Kloet said Friday.

"They understand the vision it creates, they understand the shareholder opportunity it creates and the stakeholder opportunity it creates to build a stronger, bigger company."

TMX is pushing ahead with plans to create the transatlantic exchange giant after rejecting an alternative Canadian proposal from Maple Group Acquisition Corp., which is now taking its $3.6-billion cash-and stock proposal directly to shareholders.

The outcome of the battle between rival bidders for the TMX Group will determine the future of the Canadian capital markets company, which runs the Toronto Stock Exchange, the Montreal derivatives market, the TSX Venture Exchange and other securities markets.

TMX cited a host of reasons for deciding the proposal from Maple Group -- made up of four Canadian banks and five pension plans -- was not superior, including debt and regulatory hurdles.

Kloet dismissed the threat of the Maple bid derailing its favoured plan. He said he doesn't think the conditions of the Maple proposal can be met for shareholders to tender their shares before they vote on the merger at a June 30 special meeting.

"Their own regulatory conditions are such that they create enough doubt that I don't think that's a factor for our shareholders to weigh," he said.

The Maple bid depends on a review by the Competition Bureau, which must rule whether the group can go ahead with plans to integrate the Toronto Stock Exchange and Alpha, something that would give the group control of about 80 per cent of stock trading volume in Canada.

Shareholders have become the key battleground in determining the future of the Canadian capital markets operator. Both bids are fraught with regulatory risks and could leave the exchange with less-than-ideal ownership structures.

The Maple bid would create a trading monopoly in Canada, while the LSE "merger of equals", technically a takeover by the British exchange operator, would leave voting control in the hands of a foreign owner.

The merger is subject to approval from various Canadian regulators, including a review from Industry Canada, which must determine if the merger is "of net benefit" to Canada.

Shareholders must make their decisions on the two bids before they know whether either will receive the regulatory approval they require.

But Kloet said TMX shareholders are excited about the plan to create a transatlantic exchange giant, which will help accelerate TMX's business plan and launch a larger opportunity to sell its technology to markets around the world.

"Many of them see this as a very good deal for the institution," he said.

Maple will begin mailing out its proposal to shareholders shortly, but has also made it clear it is leaving its door open to negotiation with the TMX board.

But Kloet said that while the TMX board is bound to consider any bid, its deal with the LSE prohibits it from engaging in discussion about any proposal that is not clearly superior to its own merger plans.

"We're very committed to that combination and anybody who wants to come in with a superior proposal has to understand that that's our position."

Stock exchanges around the world are undergoing a wave of consolidation and international integration--underpinning the intense competitive pressures in the market and the divergent regulatory hurdles they face.

The Nasdaq recently saw its rival bid for the New York Stock Exchange dashed over anti-competitive concerns -- leaving the door open for a takeover by Germany's Deutsche Borse.

The Australian government rejected the Singapore stock exchange's $8.3 billion takeover bid for the Australian exchange on the grounds that it was not in the national interest.

Shares in TMX Group gained 15 cents Friday to close at $44.41 on the Toronto Stock Exchange.