CBOE settles long battle on ownership with CBOT members

Discussion in 'Wall St. News' started by Uncle_Ho, Jun 3, 2008.

  1. "The Chicago Board Options Exchange has agreed to settle a long-running legal dispute with members of CME Group Inc.'s Chicago Board of Trade, paving the way for the leading options exchange to become a public company or merge with another exchange.

    The CBOE's board approved the settlement of the dispute, which had held the options exchange back in its plans to become a public, for-profit company. CBOT members, who helped start the Chicago Board Options Exchange in the 1970s, argued that their involvement with the company gave them ownership rights, but CBOE traders and members responded that the two companies were separate and that CBOT members' rights on the CBOE didn't include an equity stake in a demutualizing options exchange.

    Under terms of the agreement, CBOT members will receive 18% of the options exchange. The exchange is estimated to be worth $4 billion to $6 billion. CBOT members will also get $300 million in cash, people familiar with the matter said. The settlement agreement was reported Monday in Crain's Chicago Business.

    CME is working on a separate deal to acquire the owner of the New York Mercantile Exchange, and was eager to put the CBOE matter behind it."


    Does this have an effect on CME stock since the CBOT is owned by the CME, and is this what is recently related to thier sinking stock price?