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US exchange BATS to buy Chi-X Europe: report

NEW YORK (AFP) – BATS Global Markets, a leading US stock exchange operator, has struck a deal to buy Chi-X Europe, The Wall Street Journal reported Thursday amid rumors of a Nasdaq-ICE tie-up.

With merger mania sweeping the exchange operator industry, the Journal said that Kansas-based BATS had agreed to buy pan-European trading platform Chi-X Europe in a deal valued at up to $360 million (264.7 million euros).

The newspaper cited three unidentified sources familiar with the situation.

The transaction will likely be announced by the middle of next week at the latest, following further discussions with stakeholders and employees, according to two of the people, the Journal said. The deal could be announced as soon as Friday.

An initial $300 million price would be boosted by $30 million each in 2012 and 2013 if Chi-X Europe meets its performance targets. The deal price is based on an estimated $1.2 billion valuation for BATS, the newspaper said.

BATS, the number-three US markets operator, and Chi-X Europe, Europe's second-largest trading platform, announced Friday that they would extend exclusive takeover talks begun in December.

A fast-moving surge of merger and acquisition activity in the global securities and derivatives exchange sector has spurred speculation that other tie-ups are in the works.

Last week the London Stock Exchange Group said it would merge with its Toronto counterpart, TMX Group, to create the world's biggest trading platform and dominate raw materials and energy.

Deutsche Boerse and NYSE Euronext unveiled Tuesday their merger deal that would forge the world's biggest exchange by revenues and a powerhouse in derivatives trading.

On Thursday, Fox Business Network reported of a "possible partnership" between the tech-rich Nasdaq and the IntercontinentalExchange (ICE), specialised in raw materials and derivatives.

Fox said the discussions had reached "a critical stage" and that Nasdaq had hired Bank of America "to look at possible deals."

Spokespersons for ICE and Nasdaq, contacted by AFP, refused to comment on the report.