Business & Finance
Business and Finance
Business and Finance
Fri, June 18, 2010
Thu, June 17, 2010 CBOE Holdings, Goldman Sachs, Chicago Mercantile Exchange, NYSE Euronext and InterContinental Exchange
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: CBOE Holdings Inc. (Nasdaq: [ CBOE ]), Goldman Sachs Group (NYSE: [ GS ]), Chicago Mercantile Exchange Group Inc. (NYSE: [ CME ]), NYSE Euronext Inc. (NYSE: [ NYX ]) and InterContinental Exchange Inc. (NYSE: [ ICE ]).
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Here are highlights from Wednesdaya™s Analyst Blog:
CBOE: New Kid on the Bourses
The much awaited initial public offering (IPO) of Chicago Board Options Exchange aCBOEa Holdings Inc. (Nasdaq: [ CBOE ]) raised $339 million from the sale of 11.7 million shares. Shares fetched $29 each, at the upper end of its expected range of $27a'$29.
The IPO was underwritten by Goldman Sachs Group (NYSE: [ GS ]). The shares of CBOE are trading on the NASDAQ under the ticker symbol "CBOE."
Founded in 1973, CBOEa™s IPO plan had been devised long back but was held up by a legal hassle with the members of the former Chicago Board of Trade (aCBOTa). CBOT is the futures exchange from which CBOE Holdings was originally spun off and which was bought by Chicago Mercantile Exchange Group Inc. (NYSE: [ CME ]) in August 2008.
The newly traded company will utilize the net proceeds of the IPO for its business operations and pay its settlement dues to the former members of the CBOT.
CBOE Holdings plans to pay regular quarterly dividends, anticipating an annual dividend target of approximately 20% to 30% of the prior year's net income, adjusted for unusual items.
Previously, when the exchange had declared to go public on March 11, 2010, CBOE had projected the IPO to be worth $300 million and further discounted it due to the ongoing debt crisis in Europe that followed the plummeting of the U.S. stock prices.
Conversely, the stock soared 12% on its debut, valuing the exchange at a whopping $2.97 billion. The CBOE IPO was valued at a higher multiple of future earnings than rival exchanges such as CME, NYSE Euronext Inc. (NYSE: [ NYX ]) and InterContinental Exchange Inc. (NYSE: [ ICE ]), given its history of rapid growth, exclusive products and potential to be acquired. Consequently, the already strong domestic peers in the industry such as NYSE, ICE and CME as well as the overseas companies such as Germany's Deutsche Boerse AG and Brazil's BM&F Bovespa SA eye CBOE as an acquisition partner.
CBOE Holdings has a smaller market capitalization of about $450 million. In contrast, its rival CME has a market capitalization of about $20.4 billion, NYSE has $7.7 billion and NASDAQ has $4.1 billion, making CBOE an affordable buyout target.
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