8-KLeadership ChangesAcquisitions & DispositionsFinancial Events+2

Cboe Global Markets, Inc. 8-K Report, Acquisition Completed (Feb 28, 2017)

Filed February 28, 2017For Securities:CBOE

Summary

This 8-K filing by Cboe Global Markets, Inc. (CBOE) announces the completion of its merger with Bats Global Markets, Inc. (Bats), effective February 28, 2017. This significant transaction combines two major exchange operators, creating a larger entity with expanded market reach and product offerings. The merger was structured as a stock-and-cash transaction, with Bats shareholders having elected to receive a mix of CBOE Holdings common stock and cash, or all cash, or all stock, based on pre-determined exchange ratios and the CBOE Holdings stock price. The filing also details CBOE's financing for the merger, including a $1.0 billion draw from a senior unsecured delayed draw term loan facility. Furthermore, the report outlines key changes to CBOE's board composition and executive leadership, including the appointment of Chris Concannon as President and Chief Operating Officer and an amended employment agreement for CEO Edward T. Tilly, reflecting his new role as Chairman. The retirement of two CBOE executives is also noted.

Key Highlights

  • 1Cboe Global Markets, Inc. (CBOE) has successfully completed its merger with Bats Global Markets, Inc. (Bats) as of February 28, 2017.
  • 2The merger was a stock-and-cash transaction, with Bats shareholders receiving a combination of CBOE Holdings common stock and cash, or solely cash, or solely stock based on election and valuation.
  • 3CBOE drew down $1.0 billion from its Term Loan Credit Agreement to finance a portion of the cash consideration for the merger, repay Bats' existing debt, and cover transaction-related expenses.
  • 4The merger resulted in significant changes to CBOE's board of directors, with the addition of three designees from Bats and the resignation of three CBOE directors.
  • 5Edward T. Tilly, CBOE's CEO, has also been appointed Chairman of the Board.
  • 6Chris Concannon, formerly CEO of Bats, has been appointed President and Chief Operating Officer of the combined entity, with an employment agreement detailing compensation and severance.
  • 7The transaction is being treated as a reorganization for U.S. federal income tax purposes under Section 368(a) of the Internal Revenue Code.

Frequently Asked Questions

This 8-K filing announces the completion of the merger between Cboe Global Markets, Inc. (CBOE) and Bats Global Markets, Inc. (Bats) and provides details regarding the financial, operational, and leadership changes resulting from this significant transaction.

Bats shareholders received a combination of Cboe Holdings common stock and cash, or could elect to receive all cash or all stock, based on a predetermined exchange ratio and the volume-weighted average price of Cboe Holdings common stock during a specified period. Approximately $955.6 million in cash and 30.6 million shares of CBOE Holdings common stock were allocated for this purpose.

CBOE financed a portion of the merger's cash component by drawing down the full $1.0 billion committed under its senior unsecured delayed draw term loan facility, which was established in December 2016. The proceeds were also used to repay certain existing Bats indebtedness and cover associated fees and expenses.

The merger resulted in the addition of three directors from Bats to the CBOE Holdings board, while three existing CBOE directors resigned. Edward T. Tilly assumed the role of Chairman of the Board in addition to CEO. Chris Concannon, formerly CEO of Bats, was appointed President and Chief Operating Officer of the combined company.