UPDATE: CBOE Members To Vote On Conversion In Early June
March 19 2010 - 1:27PM
Dow Jones News
Member-owners of the Chicago Board Options Exchange will vote on
its plan to convert to a shareholder-owned structure in early June,
according to a notice sent to seatholders late Thursday.
The vote, which requires a majority of all members to approve
the conversion, precedes a planned initial public offering for CBOE
Holdings Inc., parent of the exchange.
The notice reiterates that a float is slated to happen by the
end of June. CBOE is also seeking a second adviser to help price
the IPO.
Goldman Sachs & Co. Inc. (GS) has served as CBOE's
restructuring adviser since 2005, and will remain the sole global
coordinator of the float. It is being paid out of proceeds from the
IPO.
Notice of the planned membership vote follows a meeting of
seatholders convened Thursday by CBOE Holdings. Exchange
executives, who back the flotation, provided more details on the
IPO timeline and plans for a special dividend for seatholders.
The CBOE is the largest U.S. options exchange by volume, and its
progress toward a long-planned public float is being closely
watched after a three-year legal dispute over ownership rights in
the company was resolved in December.
The early-June vote is planned as the CBOE structures its
demutualization to occur almost simultaneously with its initial
public offering.
Conversion from the current member-owned structure will not be
complete unless the IPO happens, according to CBOE documents.
The exchange operator also detailed its intention to pay regular
quarterly dividends to shareholders following its float, setting
out an annual target of approximately 20% to 30% of the
prior-year's net income adjusted for unusual items.
Seats at the CBOE, which are bought and sold on an open market
that has offered a rough gauge for the company's indicative value,
will cease to trade by the date of the IPO's pricing, according to
the notice.
The CBOE's resolution of its legal issues in late 2010 revived
takeover speculation, with a handful of potential acquirers seen in
bigger exchange operators, such as crosstown neighbor CME Group
Inc. (CME).
The notice also quoted exchange officials as declining comment
on any interest from potential acquirers.
-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117;
jacob.bunge@dowjones.com
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