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Categorized | Financial

BATS gearing up for second try at IPO

Posted on November 30, 2015

A trader looks at his screen as he works on the floor of the New York Stock Exchange shortly after the opening bell, in the Manhattan borough of New York January 24, 2014©Reuters/Lucas Jackson

BATS Global Markets, the second-biggest US stock exchange operator, is gearing up for another attempted flotation, nearly four years after technical glitches on its own bourse forced it to withdraw its initial public offering.

A listing is likely to take place as soon as next year, according to several people familiar with the matter. It could value the company at more than $2bn including debt, analysts said.

    Morgan Stanley and Citigroup, which led the failed 2012 listing are investors in BATS and working with the company again this time around. Other banks with stakes in BATS also are expected to participate, one person familiar with the deal said. Credit Suisse, Goldman Sachs, Bank of America, JPMorgan and Deutsche Bank are investors.

    BATS had to withdraw its first IPO after a “software bug” caused its share price to plunge after it started trading.

    The botched IPO came after the 2010 Flash Crash when US stocks see-sawed dramatically in a matter of minutes, and served to reinforce concerns about the proliferation of electronic trading and its effect on the safety of the market.

    A few months later in May of 2012, technical problems also ensnared Facebook’s listing on Nasdaq although that listing proceeded.

    BATS’ renewed plans to go public, which were first reported by the Wall Street Journal, come after it poached Chris Concannon, a former Nasdaq executive from high-frequency trading firm Virtu Financial in 2014. After initially serving as president, he replaced BATS co-founder Joe Ratterman as chief executive this year.

    In 2012, BATS was valued at $760m while it is now expected to garner a valuation of more than $2bn, including debt.

    Founded as an alternative trading venue in 2005, BATS has grown to be the second largest stock exchange by trading volumes after the New York Stock Exchange.

    In 2013, BATS merged with Direct Edge, another upstart competitor in what was the most high-profile consolidation of the crop of new trading venues that arose after US regulators tried to foster competition.

    BATS, Morgan Stanley and Citigroup declined to comment.