Public Exchange Envy... BATS Files For IPO (NYX, NDAQ, CME, CBOE, ICE, BATS, BAC, C, CS, DB, JPM, MS)

The U.S. is about to get another electronic exchange listed as a public stock.  BATS Global Markets, Inc. wants to come public and has just filed for an initial public offering.  The exchange will join the likes of NYSE Euronext, Inc. (NYX), Nasdaq OMX Group Inc. (NASDAQ: NDAQ), CME Group Inc. (NYSE: CME), CBOE Holdings, Inc. (NASDAQ: CBOE), and IntercontinentalExchange, Inc. (NYSE: ICE) as the publicly traded exchanges in the U.S.

Strategic investors (and owners) are affiliates of the following: Bank of America Corporation (NYSE: BAC) via Bank of America Merrill Lynch; Citigroup, Inc. (NYSE: C) via Citi; Credit Suisse (NYSE: CS); Deutsche Bank AG (NYSE: DB); GETCO, J.P. Morgan Chase & Co. (NYSE: JPM) via J.P.Morgan; Lime Brokerage; Morgan Stanley (NYSE: MS); Tradebot Systems; and WEDBUSH.

The terms have not been set other than that the firm plans to raise up to $100 million in the sale of common shares.  Don’t look for this to trade to NYSE or NASDAQ as its primary listing.  The firm plans to list its Class A common stock on BZX under the symbol “BATS.”

The company has listed Morgan Stanley, Citi, and Credit Suisse as its lead underwriters for the offering.

BATS develops and operates electronic markets for the trading of listed cash equity securities in the United States and Europe and listed equity options in the United States.

For the first quarter of 2011, it claimed to have 10.8% share of the U.S. equity market and a 2.1% share of the U.S. equity options market; in Europe that was 6.2% share of European trading in the securities available for trading on BATS Europe.  The company is also acquiring Chi-X Europe as a multilateral trading facility and that had a 17.0% share of European trading in the securities available for trading on Chi-X Europe.

Pro forma revenues were $899.9 million for 2009 with operating income of $18.8 million and net income of $11.4 million.

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The full IPO filing with the SEC is here.

JON C. OGG