Chi-X Europe Said to Hire Lexicon as Takeover Adviser to Trading Platform

Chi-X Europe Ltd. will hire investment bank Lexicon Partners Ltd. to advise on takeover proposals after saying last week that an unidentified company made an approach to acquire it, according to two people with knowledge of the situation.

Chi-X Europe chose Lexicon after reviewing pitches from several firms last week, according to the people, who declined to be identified as the talks are private. Julia Streets, a spokeswoman for Chi-X Europe, declined to comment today. Executives at London-based Lexicon weren’t immediately available to comment.

Chi-X Europe, the London-based trading platform started in 2007 to compete with Deutsche Boerse AG and London Stock Exchange Group Plc, has been seeking to hire an adviser after announcing on Aug. 24 that it had received takeover interest. The approach came from Bats Global Markets, which operates the third-largest U.S. equity market, people familiar with the situation said the same day. The appointment of Lexicon may encourage interest from other companies, according to Andrew Mitchell, exchange analyst at Macquarie Group Ltd. in London.

“Appointing an adviser is another step toward assessing the approach they have,” Mitchell said. “Whenever a business gets an approach it’s going to draw the attention of other businesses in that industry. I’d be surprised if other exchange- related organizations weren’t now deciding whether to take a closer look.”

Bats, which isn’t publicly traded, is owned by a group of its users including Bank of America Corp., Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Getco LLC and Morgan Stanley. Chi-X Europe is owned by a similar group that includes Citigroup, Bank of America, Getco, Credit Suisse, Morgan Stanley and Instinet Inc., a New York-based unit of Nomura Holdings Inc.

Bats Global, based in Kansas City, Missouri, owns Bats Europe, the U.S. Bats Exchange Inc. and plans to start its second U.S. stock exchange, Bats Y-Exchange, or BYX, in October. Bats began trading stocks in 2006 and says it accounts for 11 percent of U.S. equity volume. It also runs a U.S. options exchange.

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net

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