Market operator BATS Global Markets has revealed the terms of its planned takeover of multilateral trading facility (MTF) Chi-X Europe, following the filing of a proposed initial public offering (IPO) today.
Multilateral trading facility (MTF) Chi-X Europe's shareholders will receive approximately 4.4 million newly issued shares of BATS Global Markets stock and approximately US$36 million in cash, following the latter's takeover of the MTF.
In addition, BATS Global Markets may pay up to an additional US$65 million in cash to Chi-X Europe's shareholders in the third quarter of 2012, if certain market share benchmarks are met.
The number of shares to be offered in BATS' IPO and the price range for the offering have not yet been determined. A portion of the shares will be issued and sold by BATS, and a portion will be sold by certain stockholders of BATS. The bookrunning managers of the proposed offering will be Morgan Stanley, Citi and Credit Suisse.
The firm, which operates the BATS Europe MTF says that it expects to benefit from various synergies as a result of the acquisition, including the transition of Chi-X Europe to the BATS trading platform, which is expected to be completed during the fourth quarter of 2011.
Subject to antitrust clearance in the United Kingdom, the transaction is expected to close during the second quarter of 2011. BATS Global Markets expects to incur one-time acquisition related costs of approximately US$8 million to US$10 million in 2011.