Sun, Oct 15, 2017 - Page 16 News List

Two Chinese parties pull out of bidding process for Chicago Stock Exchange

CONTROVERSIAL:The exchange handles less than 1 percent of US stock trading, but plans to transform itself into a venue for Chinese companies to list shares

Bloomberg

Two of the three China-based bidders for the Chicago Stock Exchange have withdrawn from the group trying to acquire the market, according to a person familiar with the matter.

Chongqing Jintian Industrial Co (重慶錦天實業) and Chongqing Longshang Decoration Co (重慶龍尚裝飾) are pulling out of the deal, said the person, who asked not to be identified discussing private negotiations.

That leaves Chongqing Casin Enterprise Group Co (重慶財信), as well as several US entities in the buyer’s group.

Will Ruben, a spokesman for the exchange at 3Points Communications, declined to comment.

The US Securities and Exchange Commission (SEC) has stalled a decision on whether to let the deal go through. While staff members at the regulator endorsed the transaction in August, commissioners decided they wanted more time to think about it.

Under the SEC’s structure, commissioners can overrule powers granted to staff attorneys to make decisions about the nation’s exchanges.

US President Donald Trump on the campaign trail last year railed against the deal. A group including US Representative Robert Pittengerand US Senator Joe Manchin wrote in a recent comment letter that they were troubled by the idea of a Chinese firm owning a US exchange.

Their opposition stands in contrast to an approval granted in December last year by the Committee on Foreign Investment in the US, which reviews the national security risks of overseas takeovers.

The exchange is seeking to have existing investors increase their stakes, which would require the company to amend its application for the deal to the SEC, said the person familiar with the matter.

Under the current plan, Casin, the group’s lead investor, is trying to buy 20 percent of the company, which handles less than 1 percent of US stock trading.

Through the takeover, the Chicago Stock Exchange hopes to transform itself into a venue where Chinese companies can list their shares.

The Wall Street Journal earlier reported that Chongqing Jintian and Chongqing Longshang had withdrawn.

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