CME Group Reportedly Mulling Bid for NEX Group Takeover

The CME’s offer is the latest move to reinforce its UK presence.

CME Group, the operator of the Chicago Mercantile Exchange, is making a ‎bid to acquire the UK-based financial technology company NEX Group, ‎according to a regulatory filing.

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News of the talks was first reported by ‎Bloomberg.‎ Quoting two sources familiar with the matter, Bloomberg added that NEX could ‎also attract interest from other exchange operators.‎

Formerly called ICAP, NEX Group rebranded as an electronic trading, post-trade and fintech company after Tullett Prebon bought its voice trading ‎business for £1.3 billion ($1.6 billion) ‎in 2016.‎

The company said in a statement: “Discussions are at an early ‎stage and there can be no certainty that an offer for NEX will be made, nor as to the terms ‎of any offer, if made.‎”

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The company’s unit NEX Markets provides FX and fixed income electronic trading technology and services via its EBS and BrokerTec platforms. NEX Markets’ EBS electronic trading platform has reported its spot FX volumes at $108.3 billion daily for February 2018.

The CME’s offer is the latest move to reinforce its UK presence. The exchange operator was reportedly considering making an offer for the London Stock Exchange Group (LSE), but has not yet decided whether to proceed with a bid.

It also submitted a bid to buy LCH Group for more than $340 million ‎pounds, setting the stage for ‎a battle over LSE’s French clearing business, which has ultimately signed a share swap deal with Pan-European stock exchange Euronext.‎

In January, NEX ‎Group’s CEO Michael Spencer has increased his stake to roughly 17 percent in the company that has a market value of nearly $3.5 billion.

‎ London-based NEX reported revenues for the fiscal year ending March 31, 2017 at £543 million ‎‎($701.9 million) vs. just £460 million ($594.5 million) in ‎‎2016, or 18.0 percent year-over-year.‎

The group’s trading operating profit was also on the uptick, climbing to £145 ‎million ($187.4 million) in FY 2017 from £139 million ‎‎($179.6 million) in the year prior – good for a 12% ‎percent ascension. NEX noted that the sale of ICAP Global ‎Broking for £1.3 billion to TP ICAP plc delivered value to ‎its shareholders, creating a dominant ‎firm in the business of matching trades between banks.‎

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