CME Group Inc (CME.O), the world’s biggest futures exchange operator, on Wednesday denied a media report that it approached rival Cboe Global Markets Inc (CBOE.Z), home to the VIX volatility index, with a $16 billion all-share takeover offer.
The Financial Times, citing people familiar with the talks, reported CME offered 0.75 of its own shares for each Cboe share, representing a per-share value of $150.
Cboe declined to comment. CME said the reportwas false.
“CME Group denies all rumors that it is in conversations to acquire Cboe Global Markets. The company has not had any discussions with Cboe whatsoever,” it said.
Shares of Cboe ended 1.3% lower, while CME shares closeddown 3.8%.
“There’s no sense spreading a rumor if something doesn’t go up,” Cboe investor Thomas Caldwell said of the share prices.
There is not much product overlap between CME and Cboe, so a takeover might make sense, he added.
CME is known for its energy, interest rate, agriculture and equity index futures, which investors use to hedge against price moves.
Cboe has proprietary rights to the VIX, also known as Wall Street’s fear gauge, as well as S&P 500 options, and offers trading across options, equities, foreign exchange and futures.
Options trading has surged in recent months, with asset managers using the derivatives for earning additional alpha and capital efficiency, so there is a lot of interest in that market, said Spencer Mindlin, an analyst at Aite Group.
“It’s a game of scale. Exchanges need to get bigger because it’s very much of a commoditized function, and whether it’s data, or exchange matching, or post trade, it’s definitely an industry that benefits from greater scale,” he said.
Cboe was spun off of the Chicago Board of Trade (CBOT) in 1973, and then CBOT merged with CME in 2007.