Reuters: Deals: BATS sets IPO terms, co valued at about $810 million

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BATS sets IPO terms, co valued at about $810 million Mar 12th 2012, 13:58 Mon Mar 12, 2012 9:58am EDT (Reuters) - BATS Global Markets Inc moved a step closer to becoming a publicly listed entity on Monday with the filing of its IPO terms, as the third largest U.S. exchange operator looks to better compete in a rapidly consolidating sector. BATS said on Monday it expects to price the initial public offering of 6.3 million Class A common shares between $16 and $18 a piece. At the mid-point of the expected range, BATS is valued at about $810 million. BATS has been buying smaller rivals to build and diversify its operations to compete with larger rivals NYSE Euronext (NYX.N) and Nasdaq OMX Group (NDAQ.O). In August, BATS received regulatory approval for its primary listing business, allowing it to list shares on its exchange -- a move seen as an attempt to take on the NYSE and Nasdaq in one of their bread-and-butter businesses. It secured British regulatory backing for its $300 million purchase of rival Chi-X Europe in November, which created the region's top share-trading venue. BATS said all the shares in the offering are being sold by selling stockholders, including affiliates of Lehman Brothers Holdings and certain senior executives and directors. BATS, headed by 45-year-old Joe Ratterman, was formed in 2005 by major banks and trading firms looking to break the oligopoly that the NYSE and Nasdaq had over U.S. stock trading. For 2011, BATS had an 11.3 percent share of the U.S. equity market and a 3.1 percent share of the U.S. equity options market, according to a regulatory filing. In May last year, the Lenexa, Kansas-based exchange operator had filed with the U.S. Securities and Exchange Commission to raise up to $100 million through a public offering. The exchange operator will have two classes of common stock - Class A shares are entitled to one vote, while Class B common shares, held by strategic investors, are entitled to two and a half votes. Upon completion of the offering, strategic investors will collectively own about 79 percent of the total voting power of outstanding stock, according to a regulatory filing. BATS Global also added Deutsche Bank, JP Morgan, BofA Merrill Lynch and five others to the list of underwriters for the offering. Morgan Stanley and Citigroup are acting as representatives for the underwriters in the offering. As certain underwriters are deemed to have a "conflict of interest" under FINRA rules, Raymond James will act as qualified independent underwriter for the offering, BATS said in the filing. The exchange operator intends to list its shares on BATS Exchange under the symbol 'BATS'. (Reporting by Aman Shah and Ashutosh Pandey in Bangalore; Editing by Gopakumar Warrier) Link this Share this Digg this Email Reprints

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