Chicago Board of Trade Sticks With IPO Plan

Shunning offers for a merger or sale, the Chicago Board of Trade said Tuesday that it would proceed with its plan to sell shares in the No. 2 U.S. futures exchange to the public.

After reviewing strategic alternatives with its financial and legal advisors, the company said it was “not advisable at this time” to pursue a sale or other transaction that would change control of the 157-year-old exchange.

Instead it’s full steam ahead as the board “instructed the company’s management to proceed with the company’s pending initial public offering.”

The Chicago Board of Trade, the dominant market for derivatives on U.S. Treasury debt, has said it plans a $150-million initial public offering on the New York Stock Exchange, valuing the exchange at about $1.7 billion or $33 to $36 a share.

Exchange insiders were confident before the monthly board meeting that the directors would opt for an IPO rather than sell out to another exchange or group of investors.

Chicago Board of Trade membership prices have more than doubled in the last year amid purchases by outside investors hoping to profit from an IPO. A full membership changed hands at $2.2 million on July 25.

Leading the list of those interested in the exchange was said to be the cash-rich Chicago Mercantile Exchange, the largest U.S. futures mart, which staged its own successful IPO in 2002.