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CBOE May Be Worth About $3 Billion in Proposed IPO

CBOE Holdings Inc. said its initial public offering will total 11.7 million shares, which may value the owner of the Chicago Board Options Exchange at about $3 billion.

The Chicago-based company will have 102.6 million shares following the deal, according to a filing today with the Securities and Exchange Commission. CBOE is converting 930 seats, or memberships, into shares as part of a demutualization process. The last seat sold for $2.35 million on May 17, according to the company’s website.

Based on that price and the expected share count, the CBOE would be worth about $3 billion, according to calculations by Jennifer Radman, an associate money manager at Urbana Corp. and Caldwell Financial Ltd., Toronto-based investment firms that own CBOE seats. The exchange expects members to vote on the proposed ownership restructuring this month and complete the conversion by the end of June, according to an April filing.

“My sense is that it’ll get approved,” said Thomas Caldwell, who owns 54 CBOE seats through Urbana and Caldwell Financial. “Everybody’s ready to get this thing done. It’s been a long, dragged-out process.”

Caldwell, who purchased the last seat on May 17, said the votes must be in by May 21 and the exchange will hold a meeting later that day to go over them. CBOE is the largest U.S. options market and the nation’s last major member-owned bourse.

NYSE Euronext and Nasdaq OMX Group Inc., the largest owners of U.S. equity exchanges, are valued at $7.51 billion and $3.97 billion, respectively. CME Group Inc., which owns the world’s biggest futures exchange, is worth $20.4 billion.

At a value of $3 billion, CBOE’s price-to-earnings ratio is about 28.7 times profit from the past 12 months. That’s closest to CME, whose multiple is 22.7. NYSE and Nasdaq trade for 12.4 and 10.7 times trailing earnings, respectively.

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