BATS takeover of Chi-X at risk, news report says

4 July 2011

The proposed takeover of the Chi-X trading platform by BATs Global Markets Inc is now at risk, a news report has claimed.

According to the Financial Times (FT), which quoted unnamed sources familiar with the deal, several Chi-X shareholders are evaluating alternative buyers after the potential acquisition was referred to the UK’s Competition Commission.

Other options being considered by the shareholders include Chi-X retaining its independence, the report said.

The deal was referred to the commission by the Office of Fair Trading (OFT) in June as it was claimed that the merger would reduce the number of suppliers of trading services for UK-listed equities to two.

Ali Nikpay, OFT senior director and decision maker in this investigation, said: “This case is not one in which we have encountered widespread customer complaints.

“However, we cannot rule out the prospect that such a structural shift in the marketplace would lead to a substantial lessening of competition.”

The CC is due to reveal the outcome of its investigation by 2 December although it has the option to extend this reporting period by a further eight weeks if necessary.

Instinet, a firm with a 35 percent stake in Chi-X, is among the shareholders examining other options for the firm, the FT reported.

By Jim Ottewill

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