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Four new financial companies have joined a rival Canadian-only $C3.6 billion bid for the TMX Group that could block a proposed merger of the Toronto and London stock exchanges.

Maple Group Acquisition Corp. announced Sunday that Desjardins Financial Group, Dundee Capital Markets, GMP Capital Inc. and Manulife Financial have signed on as investors.

Manulife is Canada’s largest insurance company and Desjardins the biggest credit union, with major financial operations in Quebec. Dundee and GMP are smaller wealth managers.

Maple, made up of a who’s who of Canada’s major financial players _ including several major banks _ has put forward a US$3.67 billion bid to acquire TMX Group, which owns the Toronto exchange.

TMX rejected the bid, saying there are too many uncertainties, including regulatory and debt risks.

The bid from the London Stock Exchange is worth about US$3 billion.

The Maple bid is meant to keep TMX in Canadian hands after many bank and government officials raised concerns about the so-called “merger of equals” with the London Stock Exchange, which is technically a takeover by the British operator.

But TMX Group is intent on pushing ahead with the London Stock Exchange transaction and has publicly dismissed the threat that shareholders would accept the Maple proposal.

On Sunday, TMX declined to comment on the new Maple Group partners.

TMX’s rejection prompted Maple to go directly to shareholders with its offer. It hopes the addition of more big investors will send them a stronger signal.

A statement from Maple Group didn’t indicate if it would raise its bid, but spokesman Luc Bertrand says the additional investors are another indication that its offer is superior to the merger with the London exchange.

“Our vision for an integrated exchange provides a better way forward for Canada’s capital markets,” he said in the release.

Monique Leroux, Desjardins’ president and CEO, said the Maple bid for TMX “provides Canadians with an excellent opportunity to collaborate and cooperate in order to maintain a strong and growing financial industry that will enhance our economy both in Quebec and across Canada.”

Ned Goodman, chairman of Dundee Capital, said, “Canada’s small-and mid-cap companies and markets will do better with Maple than they will with the LSE. As an independent broker-dealer, we support Maple’s vision.”

Maple went directly to shareholders last month, announcing an informal C$48 (US$48.95) per share proposal -_ which represents a 24 percent premium to the implied value of the merger with the LSE Group.

Members of the Maple Group Acquisition Corp. include Alberta Investment Management Corp., Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, CIBC World Markets Inc., Fonds de solidarite des travailleurs du Quebec, National Bank Financial Inc., Ontario Teachers’ Pension Plan Board, Scotia Capital Inc. and TD Securities Inc.

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South Korea’s inflation rate eased in May for a second straight month, though remained above a level the central bank finds worrisome.

The consumer price index rose 4.1 percent from a year earlier, the government’s Statistics Korea said Wednesday.

The rate has been above 4 percent for five straight months, which is outside the Bank of Korea’s so-called tolerance range for consumer price inflation.

April’s rate was 4.2 percent, which marked a sharp reduction from 4.7 percent in March. The latter was the highest level reached since October 2008 low rates payday advance.

The central bank has raised its key interest rate four times since July last year in a bid to stem rising prices, though paused in April and May.

The bank surprised analysts last month by leaving its benchmark borrowing cost unchanged at 3 percent. Economists had expected an increase to 3.25 percent.

The Bank of Korea’s rate-setting Monetary Policy Committee next meets on June 10.

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Canadian auto shoppers are finally showing they

A rush by European officials to maintain a 65-year lock on the International Monetary Fund’s top job leaves little hope for a candidate from an emerging economy, India’s representative to the institution said.

“I’m not totally pessimistic but I’m not at all optimistic,” Arvind Virmani, who represents India and three other countries on the IMF board, said in an interview yesterday in Washington. “There is no indication which suggests that the result will be any different this time.”

Officials including U.K. Chancellor of the Exchequer George Osborne and Italian Prime Minister Silvio Berlusconi have said French Finance Minister Christine Lagarde should replace countryman Dominique Strauss-Kahn, who resigned last week following his arrest on sexual assault charges in New York, as the IMF’s chief.

Virmani said the European stance contradicts calls by the Group of 20, which includes the advanced economies plus major emerging ones, for a selection process based on merit rather than geography.

Virmani and IMF representatives for Russia, China, South Africa and Brazil yesterday released a statement urging “abandoning the obsolete unwritten convention” by which the IMF leader is always a European and the head of the World Bank an American. Countries from the European Union hold about 31 percent of the votes at the agency and the U.S. 17 percent.

“If the Fund is to have credibility and legitimacy, its managing director should be selected after broad consultation with the membership,” the directors from the so-called BRICS nations wrote.

Virmani said he is consulting with his counterparts from Brazil, Russia and China about putting a candidate forward.

Advising Friends

“At this point in time if I was advising my own friends, I would have to frankly tell them that ‘the probability of your winning is minuscule and you’re really competing for second place,’” he said. At the same time “there is still perhaps merit in saying that ‘we tried’ even though we knew that it would fail.”

Mexico is nominating its central bank governor, Agustin Carstens, who in an interview yesterday said it was too early to say which countries will back him.

German Chancellor Angela Merkel told reporters last week that Europe’s sovereign-debt crisis “speaks for a European candidate.”

Virmani objected to that logic.

“There was no discussion about who’s the best, there were statements, saying that ‘we have to have a European because there’s a European crisis,’” said Virmani, who also represents Bangladesh, Bhutan and Sri Lanka.

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TOKYO

The International Monetary Fund said it aims to complete the selection of a successor to Dominique Strauss-Kahn by June 30.

Countries will be able to nominate candidates for the managing director’s position between May 23 and June 10, the Washington-based IMF said in a statement today. The board will meet with all candidates if there are fewer than four and with a short list if there are more.

The procedure “allows the selection of the next managing director to take place in an open, merit-based, and transparent manner,” said Shakour Shaalan, the senior member of the 24- person board.

The IMF said the board’s objective is to select the managing director by consensus.

French Finance Minister Christine Lagarde emerged as the leading contender to replace Strauss-Kahn, who was indicted yesterday on charges including attempted rape, as European officials moved to maintain control over the institution.

Officials in emerging markets including Thailand, Russia and South Africa said the next IMF managing director should come from a developing nation even as they failed to unite behind one candidate the way Europe coalesced around Lagarde.

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China reported a more-than-estimated $11.4 billion trade surplus for April as U.S. officials pushed at talks in Washington for faster gains in the yuan.

Today’s number, released by the customs bureau, compared with a surplus of $140 million the previous month and $1.68 billion a year earlier. Import growth slowed to 21.8 percent in April from a year earlier while exports grew 29.9 percent.

At the start of the two-day Strategic and Economic Dialogue yesterday, U.S. Treasury Secretary Timothy F. Geithner said China has been making progress “towards a more flexible exchange rate” and weaning its economy off a dependence on exports. The yuan has strengthened this year to the highest levels since 1993 and the fastest inflation since 2008 may encourage officials to allow more gains to pare import costs.

“The yuan is facing great appreciation pressure” because of inflation, Ma Jun, chief China economist at Deutsche Bank AG, said before the data. Political relations with the U.S. play “a very delicate role” in the nation’s currency policy, he said.

The median forecast of 27 economists surveyed by Bloomberg News was for a $3.2 billion surplus.

The People’s Bank of China set the yuan’s reference rate at a record high of 6.4988 per dollar yesterday and allowed the currency to strengthen 0.9 percent in April, the biggest monthly gain this year.

‘Unjust’ Manipulation

Senator Sherrod Brown, a Democrat from Ohio, urged the U.S. administration to press China on the currency issue and also said Congress should pass legislation to protect American workers from an undervalued yuan. Brown and Senator Olympia Snowe, a Republican from Maine, have proposed a measure to allow additional sanctions to address currency issues.

“The Obama Administration has a unique opportunity during this meeting to urge Chinese officials to stop the unfair and unjust currency manipulation that threatens American manufacturing and eliminates American jobs,” Brown said in a statement. “China’s unfair currency manipulation has gone on for far too long, and it’s clear that legislation is needed to level the playing field.”

The U.S. has delayed its semi-annual foreign-exchange report, which had been due on April 15, until after this week’s meetings. The previous report, due on Oct. 15, 2010, was released on Feb. 4 and declined to brand China a currency manipulator while saying the No. 2 U.S. trading partner has made “insufficient” progress on allowing the yuan to rise.

China argues that its currency is not a key cause of global economic imbalances, and highlights the role of U.S. restrictions on Chinese purchases of high-technology products in lopsided trade between the two nations.

April Inflation

In China, consumer prices rose 5.4 percent in March, the most in 32 months, and may have climbed 5.2 percent in April, according to the median estimate in a Bloomberg News survey. The statistics bureau will release inflation data in Beijing tomorrow.

Exports rose to $155.7 billion in April and imports climbed to $144.3 billion, the customs bureau said today. The median forecast in Bloomberg News surveys was for a 29.5 percent gain in overseas sales and a 28.9 percent jump in inbound shipments.

“The price factors that have boosted the import bill recently are expected to ease markedly due to the recent sharp correction in global commodity prices,” Deutsche Bank’s Ma said.

Commodities had their worst weekly plunge since December 2008 last week, with oil declining 15 percent. Higher fuel and raw-material prices had contributed to the nation recording its first quarterly trade deficit since 2004 in the January-to-March period.

Companies benefiting from the nation’s trade gains this year include Cosco Pacific Ltd., part of China’s largest shipping group. Cosco said it more than doubled first-quarter profit, helped by a 20 percent increase in throughput at its container terminals after it added facilities to cope with rising exports of toys, furniture and auto parts to the U.S. and Europe.

–Victoria Ruan. Editors: Nerys Avery, Paul Panckhurst

To contact Bloomberg News staff on this story: Victoria Ruan in Beijing at +86-10-6649-7570 vruan1@bloomberg.net

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Tyson Foods said Monday that its second-quarter earnings were unchanged from a year ago because higher feed costs offset improving demand and higher meat prices.

The company raised prices for chicken, beef and pork, indicating that higher global grain costs are finally working their way to the grocery store meat counter.

CEO Donnie Smith warned investors that the meat industry is still facing at least months of volatility. Higher gasoline prices could crimp consumer demand. At the same time, Tyson’s profits could be squeezed by higher input costs. The company expects feed costs alone to be about $500 million higher during the second half of the fiscal year than they were in 2010.

“We have a wall of costs heading toward us,” Smith told analysts during a conference call.

Its shares tumbled 95 cents, or 5 percent, to $17.94 in morning trading.

The company reported net income was $156 million, or 42 cents per share, in the three months ended March 31. That’s unchanged from $156 million, or 42 cents per share, a year earlier.

The earnings were slightly below the average forecast from analysts surveyed by FactSet of 43 cents per share.

Tyson Foods Inc.’s revenue climbed 16 percent to $8 billion. Analysts expected $7.52 billion. The company said it sold more chicken and pork, but operating income fell 12 percent to $303 million as grain prices rose.

The company said beef prices shot up nearly 20 percent while pork prices jumped 18 percent and chicken prices rose 3.7 percent compared with last year payday loan lenders. Prices for prepared foods rose 11 percent. Overall, prices rose 12 percent across the company’s product lines.

It takes months for higher grain prices to work their way to the grocery store because raw ingredients account for just a fraction of the total cost of food. But meat companies tend to pass on the higher prices first, in part because their products are sold fresh.

The U.S. Department of Agriculture predicts overall meat prices will rise between 6 and 7 percent this year.

Raising prices is key to Tyson’s profitability, because the price of corn is trading near all-time highs. Feed costs are the biggest expense for raising chickens and livestock, and meat companies have been hard pressed to pass on those costs to struggling consumers.

But it appears the market is finally able to support higher prices, with sales volumes rising for chicken and pork, while beef sales fell less than 1 percent amid the price hikes.

Tyson said prepared foods sales fell 4.6 percent during the quarter, indicating that demand is still relatively weak for Tyson’s more expensive, and profitable, products like pre-cooked chicken nuggets. But the lower volumes were offset by an 11.1 percent price hike.

Smith said Tyson expects to match last year’s record net income of $780 million as demand stays strong through the rest of the year.

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BEAMSVILLE, ONT.

The data breach that hit Sony’s PlayStation Network resulted from a “very carefully planned, very professional, highly sophisticated criminal cyber-attack designed to steal personal and credit card information for illegal purposes,” a Sony executive said.

In a letter to members of the House Commerce Committee released Wednesday, Kazuo Hirai, chairman of Sony Computer Entertainment America LLC, defended the company’s handling of the breach.

Sony first disclosed the attack last week and said it may have compromised credit card data, email addresses and other personal information from 77 million user accounts. On Monday, Sony said data from an additional 24.6 million online gaming accounts also may have been stolen.

The company has shut down the affected systems while it investigates the attacks and beefs up security. Hirai said Sony is working “around the clock to get the systems back up and to make sure all our customers are informed of the data breach and our responses to it.”

Addressing criticism that the company waited too long to inform customers, Hirai said Sony waited until it had a solid understanding and confirmation of the extent of the attack and its implications.

“Throughout the process, Sony Network Entertainment America was very concerned that announcing partial or tentative information to consumers could cause confusion and lead them to take unnecessary actions if the information was not fully corroborated by forensic evidence,” he wrote.

Although Sony began investigating unusual activity on the PlayStation network on April 19, it did not notify consumers of the breach until April 26.

Hirai’s letter said the company knows who is responsible for the attack and is working with outside security and forensics consultants and the Federal Bureau of Investigation.

The letter also noted that the breach came on the heels of large-scale, coordinated denial-of-service attacks launched by a loose international group of hackers called Anonymous against several Sony operations in retaliation for a complaint filed by the company against a hacker in U no fax payday loan.S. District Court in San Francisco.

On Sunday Sony discovered that intruders had planted a file named “Anonymous” on one server that had been breached, Hirai said. Late last year, Anonymous distributed hacking software to be used against companies that stopped doing business with the anti-secrecy site WikiLeaks after it released thousands of classified government documents.

Hirai’s letter added that Sony may not have immediately detected the PlayStation breach in part because its security teams were busy trying to defend against the denial-of-service attacks.

“Whether those who participated in the denial-of-service attacks were conspirators or whether they were simply duped into providing cover for a very clever thief, we may never know,” Hirai wrote.

Hirai was one of three Sony executives who bowed in apology for the data breaches for several seconds at the company’s Tokyo headquarters on Sunday.

His letter was in response to an inquiry by Rep. Mary Bono Mack, R-Calif., who chairs the House Commerce Subcommittee on Commerce, Manufacturing and Trade, and Rep. G.K. Butterfield of North Carolina, the subcommittee’s top Democrat.

Sony officials were invited to testify at a subcommittee hearing on data breaches held Wednesday, but did not appear.

One witness, David Vladeck, director of Federal Trade Commission’s bureau of consumer protection, during his testimony called for legislation that would require companies to implement reasonable data security policies and procedures, and notify consumers in the event of a breach.

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