CBOE proposes IPO of 11.7 million shares

Posted May 18, 2010 at 4:13 p.m.

Dow Jones Newswires | The Chicago Board Options Exchange has assembled a team of 18
underwriters for its planned initial public stock offering in June under the ticker
CBOE. CBOE Holdings Inc. said in a filing Tuesday that it will sell 11.7
million shares to be listed on the Nasdaq Stock Market in an initial
public offering expected to raise up to $300 million, which would value the exchange at about $3 billion.

The company is the last large member-owned exchange in the U.S., with its float delayed by several years amid legal wrangling about its ownership.

The underwriting team is viewed as large among comparative transactions, with Goldman Sachs & Co. acting as sole global coordinator alongside six joint bookrunners.

The bookrunners include the IPO debut for Citadel Securities, the investment banking arm of the Chicago-based hedge-fund-firm manager launched last year. Since 2006, only five U.S.-listed IPOs have attracted a larger lineup of underwriters, according to data tracker Dealogic. These included Man Financial, the broker now known as MF Global, as well as much larger offerings for MasterCard Inc., Hertz Global Holdings Inc., Blackstone Group L.P. and Visa Inc.

CBOE plans to sell 9.6 million shares in the offering, with selling stockholders adding another about 2.1 million, according to a filing with the Securities and Exchange Commission.

The exchange operator plans to pay quarterly dividends beginning in the third quarter of 2010, with an annual dividend target of 20 percent to 30 percent of the previous year’s net income.

Any dividend payment will be decided upon by the company’s board of directors, according to the filing.

Goldman Sachs is joined as bookrunner by Bank of America Merrill Lynch, Barclays Capital, Citadel Securities, Citigroup, JP Morgan Chase & Co. and UBS Investment Bank.

Two other Chicago firms — Cabrera Capital Markets and Loop Capital Markets — join Citadel on the roster.

CBOE seat prices have firmed in recent days, with one selling Monday for $2.35 million, up from $2.3 million last week.

Exchange stocks have been mixed so far this year, with NYSE Euronext the top performer after a 36 percent gain. CME Group Inc. is down almost 6 percent.

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