Indiana Grain Company, LLC

Posted: 03/18/10

By: tomgrisafi

We at Indiana Grain took notice of our friend Greg Burns of the Chicago Tribune this week who speculated that a merger may be in the cards for Chicago's "cousins," CME Group and the CBOE.

"Putting years of legal wrangling behind them, CME Group Inc. and rival Chicago Board Options Exchange agreed this month to jointly develop new volatility indexes," the article recaps.

A few days later, CBOE's parent company filed for its oft-postponed initial public offering, and the mating game was on.

"CME is obviously No. 1 on the list. It's the most logical fit," said Fred Grede, a veteran exchange executive and consultant tells the Trib. "But it always gets back to the price."

Industry insiders say it's likely the exchange will go through with an IPO by the end of June, before making any merger deal, as did the Chicago Board of Trade and New York Mercantile Exchange before they were purchased by CME. Otherwise, setting a price would be difficult with so many risks to consider. Reported estimates of the CBOE's value have varied wildly, from a realistic $2 billion to a wishful-thinking $5 billion.

Source: Chicago Tribune

Be the first to comment on this blog!