(Reuters) — Chicago Board Options Exchange directors on Thursday approved plans to pursue an initial public offering of common stock of holding company CBOE Holdings Inc.
CBOE , among North America's last remaining member-owned exchanges, aims to demutualize and complete the IPO at the same time, by mid-2010, Chairman William Brodsky said a notice to members of the largest U.S. options venue.
The exchange, which this month settled a long-running ownership rights suit, said it expects to file for an IPO with the U.S. Securities and Exchange Commission by the end of the 2010 first quarter.
It also suspended the buying and selling of seats for two hours on Thursday, according to another notice. One of CBOE 's 930 seats fetched $2.5 million on Tuesday, down from $2.75 million for a membership on Nov. 5, and down from a high of $3.3 million in June 2008, according to the exchange.
The notices were also posted on the CBOE website.
Members still need to approve the demutualization plan. A source familiar with CBOE 's thinking said the vote is expected to take about a month. The source also said the exchange does not anticipate regulatory hurdles ahead of demutualization.
CBOE 's long path to demutualize its membership organization into a for-profit shareholder company was snagged in a legal battle with Chicago Board of Trade members over a decades-old agreement on trading rights. On Dec. 2, the Delaware Supreme Court approved the dismissal of appeals in the case.
CBOE would use the IPO proceeds partly for repurchasing shares from members and from those who received shares under a trading rights settlement agreed earlier this year, it said.
Takeover speculation has surrounded CBOE for years and surfaced again as recently as October, when a media report said CME Group Inc., the world's top derivatives exchanges operator, was in informal talks to buy CBOE .
Once demutalized, CBOE would be able to follow in the footsteps of several peers that have gone public, including New York Stock Exchange parent NYSE Euronext.
Others, such as energy and metals exchange NYMEX -- now part of CME -- have ultimately opted to be acquired.
A total of 25 CBOE seats have changed hands so far this year, compared with 113 in 2008.
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