CBOE-CBoT settle exercise rights issue

06 Jun 2008

by Paul Francis-Grey, Jim Kharouf

Chicago Board Options Exchange (CBOE) took a major step toward an initial public offering or combination with another exchange after it struck a settlement on the longstanding exercise rights issue with former Chicago Board of Trade (CBoT) members.

CBOE announced a tentative agreement, which requires approvals from its members and CBoT shareholders that gives Board of Trade members an 18% stake in the options exchange plus $300m in cash. To qualify, CBoT members must hold trading rights at CBOE and own at least 10,251 shares of CME Group stock. The deal value varies from $768m to $1bn, depending on the source.

The deal has opened up the likelihood of CBOE soon joining the raft of exchanges that have entered into an IPO, delved into the market and acquire another exchange or alternatively be placed up for sale and snapped up by another predatory exchange.

“I am happy to say...

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CBOE-CBoT settle exercise rights issue

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