The Brazilian Mercantile & Futures Exchange S.A. (BM&F) completed its initial public offering in November, and its shares leaped more than 20%, closing on the first day of trading at 24.40 reais; the offering was reportedly the seventh largest IPO globally this year.
The BM&F entered an equity swap agreement with the CME Group in late October, in which the CME offered a 2% stake for a 10% interest in BM&F, a deal valued at $700 million.
“The deal is proceeding as expected,” and should close in 2007, says a CME Group spokesperson. The deal also includes an order-routing arrangement, allowing a connection between the CME’s Globex electronic distribution network to BM&F’s distribution network for the electronic routing of orders between the exchanges. In addition, CME Group would provide collateral management to BM&F clearinghouses; and BM&F would become a super-clearing member of the CME.
The Urbana Corporation, which concentrates on investments in private and public securities exchanges around the world, was one of the larger buyers, snagging 300,000 shares for $3.4 million U.S. dollars.