Cboe acquires NEO in an all-cash deal worth approximately C$1.2 billion

The Cboe Global Markets Inc. announced on Monday that it has agreed to acquire the NEO Exchange in an all-cash transaction worth approximately C$1.2 billion ($935 million). The acquisition is part of a “continued…

Cboe acquires NEO in an all-cash deal worth approximately C$1.2 billion

The Cboe Global Markets Inc. announced on Monday that it has agreed to acquire the NEO Exchange in an all-cash transaction worth approximately C$1.2 billion ($935 million). The acquisition is part of a “continued expansion of our Canadian franchise,” Cboe CEO Edward Tilly said in a statement. “This is an important growth opportunity for Cboe, and we are pleased to welcome NEO Exchange members, customers and employees to Cboe,” Mr. Tilly added.

The move brings Cboe’s acquisition total to eight since 2010. The ICE exchange, the parent company of NYSE Euronext, announced its $1.6 billion acquisition of the London-based LCH.Clearnet on Monday.

The Cboe Global Markets Inc. is an over-the-counter and exchange-traded futures and options marketer, with a user base of 1.25 million futures and options contracts. Its stock closed at $195.34 a share in New York Monday, below the Cboe’s first public offering price of $31 a share in March 2006.

Investors in Canada responded positively to the acquisition news, with the Cboe stock rising more than 2 percent in trading on Monday.

Cboe will pay C$8 a share for the NEO exchange, about a 50 percent premium over the closing price of the exchange for the last day of trading on March 21. The total purchase price is approximately C$1.2 billion, or C$6.67 per share, for the shares of NEO. The listing will take place under the new ticker symbol “NEOE.” NEO will become part of Cboe’s Canadian operations.

Founded in 1992, NEO is the fifth-largest over-the-counter (OTC) exchange in Canada with a market capitalization of more than C$1.5 billion. Its primary listing is the Non Participation Class of NEO shares. The exchange facilitates cash and derivatives trading in more than 15,000 listed markets around the world, with over 60 percent of the trading volume in Canada.

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