Montreal Exchange Inc. (MX) (TSX: MXX) announced today that it has reached an agreement to increase its ownership position in the Boston Options Exchange (BOX) from 31.4% to 53.2%, subject to regulatory approval. Under the terms of the agreement with the Boston Stock Exchange, a partner in BOX, MX will pay USD $52.5 million in cash for the 21.9% partnership interest in BOX held by the BSE. MX will finance the transaction from cash on hand. The transaction is subject to approval by the United States Securities and Exchange Commission (SEC) and to other customary closing conditions.
"This strategic investment will extend the footprint of the Montreal Exchange in the North American equity options market," said Luc Bertrand, president and ceo of MX. "The agreement with our longstanding US partner, the BSE, confirms our key role as technical operator and trading technology developer for this innovative US options market." The agreement follows an earlier announcement, made October 2nd, 2007 that the NASDAQ intends to acquire the BSE, excluding its partnership interest in BOX.
With the completion of the transaction, the BOX partners will be MX, Citadel, Citigroup, Credit Suisse First Boston, IB Exchange Corporation, JP Morgan, Morgan Stanley and UBS. MX became a founding partner and technical operator of BOX in 2002. BOX launched operations in February 2004 with a fully automated trading platform. BOX is recognized as one of the most technically advanced equity options exchanges competing in the US market.