Global markets firm CME Group (NASDAQ: CME) was forced to refute rumours that it had made a $16 billion bid for the owner of the Chicago Board Options Exchange, Cboe Group. On Wednesday, a report in the Financial Times stated that CME had approached its fellow Chicago exchange company about an all-share multi-billion dollar deal.
The Financial Times said that CME “offered 0.75 of its own shares for every Cboe share, according to three people familiar with the matter.”
However, the report was swiftly denied by CME, who stated:
CME Group denies all rumors that (it) is in conversations to acquire Cboe Global Markets. The company has not had any discussions with Cboe whatsoever. While the company does not typically comment on rumor or speculation, today’s inaccurate information required correction.
When approached by the Financial Times, Cboe, who also owns stock exchange operator BATS Global Markets, said it “does not comment on market rumours or speculation.”
Despite the denials, any deal would mean two of the most important names in financial market derivatives coming together.
CME Group (Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, The Commodity Exchange) is the world’s largest financial derivatives exchange and reported revenue of $4.88 billion in 2020. Cboe is the largest US options exchange and created the Cboe Volatility Index (VIX).
On Wednesday, Cboe shares spiked to a high of $138.66,on the rumours of a takeover before giving up those gains and more, closing the day at $122.74, down 1.19% from Tuesday’s close. So far, in 2021, Cboe shares have risen 31.69%. CME Group shares closed the day down 3.8% at $197.58. They are currently up 8353% for the year-to-date, at the time of writing.
Earlier this month, CME reported its trading metrics for July, showing a 3% decline in foreign exchange (forex) demand, with the average daily volume coming in at 735,000 contracts during the month. In addition, the numbers represented a fall of 20% month-on-month.
