AAA Bats Global to fly to public markets

Bats Global to fly to public markets

Bats Global Markets, a US-based financial exchange and market services provider backed by several banks, set the range yesterday for an initial public offering set to raise between $190m and $213m.

Shareholders in Bats will sell 11.2 million shares priced at between $17 and $19 each on the company’s own Bats BZX Exchange. The underwriters have a 30-day option to buy up to 1.68 million more shares, which could lift the size of the IPO to almost $245m.

Founded in 2005, Bats runs four stock exchanges in the US it claims together constitute the second largest equities market in the country, as well as two options markets and the largest equities exchange and trade reporting facility in Europe.

The company previously filed for an IPO in 2011 that would have raised up to $113m, before withdrawing it the following year.

International Securities Exchange Holdings, a subsidiary of securities exchange Deutsche Börse, holds a 9.3% stake in Bats but will not be divesting any shares, and neither will Credit Suisse Next Investors, a subsidiary of financial services firm Credit Suisse which owns a 5.9% share.

Financial services firm Citi’s Citigroup Financial Products division is selling 780,000 shares for up to $14.8m and will hold a 3.9% stake post-IPO, while Instinet Holdings, a subsidiary of financial holding company Nomura, is divesting approximately 2 million shares for up to $38m and will retain a 2.7% share in Bats.  

Bank of America Merrill Lynch is selling 3.43 million shares for up to $65.2m and will retain a 1.6% stake; JP Morgan Chase will divest 370,000 shares held by its JPMC Strategic Investments II subsidiary for up to $7m and will keep a 4.1% stake; and Goldman Sachs is selling approximately 720,000 shares for up to $13.6m and will retain a 3.7% share.

Other selling shareholders include Knight Capital Holdings, which is set to sell about 2.2 million shares for $42.4m. Investment bank Morgan Stanley will maintain a 5.7% share through its Strategic Investments I vehicle, while TA Associates will keep a 34.2% stake held by various vehicles.

Morgan Stanley and Citigroup have been appointed joint bookrunning managers for the offering while BofA Merrill Lynch, Credit Suisse, Goldman Sachs and JP Morgan are joint bookrunners. Jefferies, Barclays, Deutsche Bank Securities, Nomura, Rosenblatt Securities and Sandler O’Neill + Partners are the co-managers.  

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