(Bloomberg) -- Cboe Global Markets Inc. is sticking to its focus on organic growth in the wake of Hong Kong Exchanges & Clearing Ltd.'s failed bid for London Stock Exchange Group Plc.
“Our disciplined approach to M&A hasn't changed,” Cboe CEO Ed Tilly said in emailed remarks. “We're always assessing the industry landscape but are more focused right now on organic growth, where we think we're well-positioned.”
HKEx's $36 billion offer for LSE underscored the momentum toward industry consolidation as profit pressure mounts along with the demands of new technology. LSE is now pressing ahead with its $27 billion deal for data firm Refinitiv. Euronext NV has expressed interest in “transformational” deals and Deutsche Boerse AG has a war chest of around $2.2 billion; Singapore Exchange Ltd. says it's eyeing acquisitions in fintech and those that complement its existing capabilities.
Cboe's last major deal was its $3.2 billion purchase of Bats Global Markets Holdings Inc., agreed in 2016, just a few months after Bats went public. Bloomberg News reported in February that Cboe was considering buying Bids Trading LP, which runs one of the largest U.S. dark pools.
Read: ETF Gold Mine Is Prize in CBOE's $3.2 Billion Bats Acquisition
Cboe's shares have risen about 20% year to date, roughly in line with the S&P 500. Rivals Intercontinental Exchange Inc. and CME Group Inc. are up about 25% and 10% respectively. It is rated “buy” by seven analysts tracked by Bloomberg, with eight “holds” and one “sell.” the consensus target price is about $122, versus the stock's close Wednesday at $116.64.
Analyst Alex Kramm of UBS Group AG rates Chicago-based Cboe a “hold” given a forecast that transaction fees will move lower, and volume for proprietary products may be pressured in the near-term.
--With assistance from Viren Vaghela.
To contact the reporter on this story: Joanna Ossinger in Singapore at jossinger@bloomberg.net
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, James Hertling, Samuel Potter
©2019 Bloomberg L.P.
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