After the Securities and Exchange Commission shot down North America Casin Holdings Inc.’s bid to acquire the Chicago Stock Exchange in February, Intercontinental Exchange Inc. (ICE, Financial) announced on Thursday it has agreed to buy the securities exchange.
While the terms of the deal were not disclosed, the company, which already owns the New York Stock Exchange, did say the financial impact will not be “material to ICE or impact capital return plans” and the Chicago-based exchange will continue its normal operations. Intercontinental will also acquire all of the outstanding shares of the exchange’s parent company, CHX Holdings Inc.
In a statement, John Kerin, the Chicago Stock Exchange’s president and CEO, expressed his excitement for the deal.
“We are pleased to enter this agreement with the world’s leading exchange operator,” he said. “ICE is a proven innovator in the Exchange space and we are looking forward to joining its family of exchanges.”
The exchange, which, according to CNBC, handles less than 1% of all U.S. stock trading, has been looking for a buyer for a while. In February 2016, China-based North America Casin Holdings announced its intention to acquire the exchange. While the deal was approved by the Committee on Foreign Investment in the United States, the SEC rejected it on the grounds of lacking information about the buyers, which would make it difficult to properly monitor the exchange after the deal closed.
Following the acquisition announcement, Intercontinental’s shares rose more than 1% in premarket trading to around $73.20. GuruFocus estimates the stock has gained 4% year to date.
Of the gurus invested in Intercontinental, Pioneer Investments (Trades, Portfolio) has the largest position with 1.08% of outstanding shares. Other guru shareholders include Daniel Loeb (Trades, Portfolio), Jim Simons (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), John Rogers (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Murray Stahl (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Ray Dalio (Trades, Portfolio).
The deal is expected to close later this year.
Disclosure: No positions.
