A reported deal between Chicago’s two leading financial exchange operators, CME Group and Cboe Global Markets, briefly roiled the markets Wednesday until it was shot down as being untrue.
The Financial Times said CME, the world’s leading futures market, had made an offer to buy Cboe. But within minutes of that report hitting the wires, CME issued a flat-out denial.
“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,” its statement said. “While the company does not typically comment on rumor or speculation, today’s inaccurate information required correction.” The company declined further comment.
The initial report cited “three people familiar with the talks.” The Financial Times said CME had proposed a $16 billion deal, offering 0.75 of its shares for every Cboe share. The deal would have valued Cboe shares at about $150 each, about 20% above their current level.
Cboe spokeswoman Angela Tu said, “As a matter of policy, Cboe does not comment on market rumors or speculation.”
Trading of Cboe’s shares rallied briefly Wednesday to as high as $139 each after the report was published, then fell back. The stock closed at $122.73, down $1.38 for the day.
CME shares dipped on the news, then bounced back slightly. At the close, they stood at $197.58, down $7.81.
Both events offered high-speed traders substantial opportunities to make or lose money, and it remains to be seen if investigators will look for signs of manipulation. The exchange operators employ staff that monitors markets and works closely with federal regulators. A spokesperson for the Securities and Exchange Commission declined to comment.
CME owns the Chicago Mercantile Exchange and the Chicago Board of Trade, markets for futures tied to stock indexes, interest rates and commodities. Cboe’s base is options trading tied to stocks and stock indexes, but it also owns the popular VIX index of market volatility.
Cboe revenue has grown because trading volumes have soared. Individual investors have jumped into the market, drawn by commission-free trading available on apps such as Robinhood.