CBOE ups price on ex-members’ share buyback

By Reuters
Posted Nov. 8, 2010 at 9:48 a.m.

CBOE Holdings Inc., the biggest U.S. options market operator, boosted its bid for former members’ stock on Monday after its shares rose well above the original offering price.

The Chicago-based company will now buy shares from former members at $25 each, up from the $22.50 offered when it first announced the purchase program on Oct. 13, CBOE said in a statement.

The $300 million program, funded by proceeds from CBOE’s June initial public offering, is available to former exchange owners who received CBOE stock in return for giving up memberships when the company went public.

CBOE cut the number of shares in the offering to about 12 million, from 13.3 million as originally announced.

The shares closed at $24.65 on Friday, and some analysts had speculated the CBOE would need to find other ways to use its cash if the program was not fully subscribed.

The shares, technically known as Class A-1 and Class A-2 common stock, cannot be sold on the public market until the expiration of lockups in December 2010 and June 2011.

The tender offer provides an early out for those former members who want quick cash.

The company also extended the program, due to expire on Friday, to Nov. 23.

About 2.3 million of a possible 13.3 million shares had been tendered as of Friday at the original $22.50 price, the company said in a statement.

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CBOE Holdings

CBOE Holdings Inc. claims it is the largest option exchange in the United States. The company, in addition to its core options trading business, provides marketplaces for trading futures contracts...

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