Friday, September 23, 2016
2 of the biggest exchange groups in the US are in takeover talks: Bloomberg
The Chicago Board Options Exchange, commonly known as the CBOE, is in talks to buy Kansas-based Bats Global Markets, according to Matthew Monks at Bloomberg.
A sale of Bats, which is the second largest equity market in the US, would come less than six months after the company went public. Shares priced at $19 at the IPO, and closed at around $26.53 on Thursday. That gave it a market cap of around $2.6 billion.
The CBOE is the largest US options exchange, and is valued at around $5.65 billion.
Started in 2005, Bats is known for aggressively competing for market share, going up against establishment names like the New York Stock Exchange and Nasdaq in the US, and the London Stock Exchange in Europe.
In March, it launched a new gauge of stock market volatility with the options specialist T3Index. The index, known as SPYIX, or Spikes, competes with the widely used CBOE volatility index, which is known as the VIX and is often described as the "Fear Index."
According to a news release earlier this month, Bats had a 21.1% market share in US equities, and a 23.4% market share in Europe, in August.
The exchange group has been especially focused on the burgeoning ETF business, and was the number one US market operator for ETF trading in August, executing 24.1% during the month. It also said it had won 26% of US ETF listings this year to date. It also has a growing US options business, reporting a 10.7% market share for August.
A deal, if it were to go ahead, would be the latest sign of consolidation in the global exchange business.
The London Stock Exchange and Deutsche Boerse are in the midst of trying to seal a deal to combine forces, while a group of Chinese investors is hoping to buy the Chicago Stock Exchange.
Going further back, The Intercontinental Exchange acquired the Singapore Mercantile Exchange in 2014, and the New York Stock Exchange in 2013. And the London Metal Exchange was acquired by Hong Kong exchange HKEx in 2012.