“dark pool”：Chi-X accounts for 25 per cent of trading in FTSE 10

Chi-X receives approach from 'third party'‎
Financial Times - Jeremy Grant - 18 hours ago

It also operates a “dark pool” block trading facility called Chi-Delta. In the UK, Chi-X accounts for 25 per cent of trading in FTSE 100 shares and was a ...

Chi-X receives approach from ‘third party’
By Jeremy Grant

Published: August 24 2010 00:14 | Last updated: August 24 2010 00:14

Chi-X Europe, the pan-European share trading platform, said on Monday it had received an approach that could lead to an offer being made for the company.

It said the “enquiry” from an unnamed third party “may not lead to an offer for the whole or partial sale of the company”.

EDITOR’S CHOICE
FT Trading Room - Aug-22.Chi-X bets on Asia equity trading demand - Aug-02.Multiple venues leave Europe ‘open to abuse’ - Apr-06.Knight to take stake in Equiduct - May-25..A sale of the company could lead to a big shake-up of Europe’s share trading markets.

In recent months there has been speculation that interested bidders for Chi-X, which was been for sale periodically in the past 18 months, would be Nasdaq OMX and Deutsche Börse. Neither would comment on Monday night.

Industry experts have also suggested bidders might come from specialist private equity funds, or further afield involving exchanges in Brazil or Singapore seeking a European foothold.

Nasdaq OMX in April abandoned an 18-month attempt to break into pan-European share trading by announcing the closure of Nasdaq OMX Europe.

That business was one of six so-called “multilateral trading facilities” (MTFs) that sprang up in the wake of the Markets in Financial Instruments Directive, a Brussels rule that broke the monopolies of established national exchanges in Europe, allowing competitors to emerge.

Chi-X’s shareholders are Nomura, with 34 per cent through its Instinet brokerage business; BNP Paribas; Citi; Credit Suisse; Goldman Sachs; Merrill Lynch; Morgan Stanley; Société Générale; and UBS, as well as Citadel, Getco and Optiver, three of the world’s largest market-making firms.

It was also set up as an MTF, in 2006. Launched a year later it quickly overtook Deutsche Börse, the London Stock Exchange’s UK markets and the Spanish exchange to become the second-largest European bourse by turnover this year.

Chi-X offers trading in 1,200 blue chips across 23 indices and 15 main European markets, as well as exchange traded funds and exchange traded commodities. It also operates a “dark pool” block trading facility called Chi-Delta.

In the UK, Chi-X accounts for 25 per cent of trading in FTSE 100 shares and was a key factor in forcing the London Stock Exchange to cut fees and upgrade its trading systems.

Chi-X was expected on Tuesday to start the process of appointing bankers to advise on any formal offer. Analysts suggest Chi-X Europe could be valued at $200m-$300m.

John Woodman, Chi-X Europe chairman, said: “This interest in Chi-X Europe is a result of our track record in becoming a major European exchange over the last three years and our move into profitability in 2010.

“We were not seeking a transaction and the option of remaining independent would allow us to build further value for shareholders,” he added.

Nasdaq OMX already has 22 per cent of European Multilateral Clearing Facility (EMCF), which acts as clearing house for Chi-X Europe.
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