Commodities and currency exchange operator CME Group is competing against Germany's Deutsche Boerse in a final round of bidding for German-based foreign exchange trading platform 360T, three industry sources told Reuters on Friday. The sources said 360T, one of a handful of multi-bank, multi-user platforms which have revolutionised foreign exchange trading over the past decade, would choose one of the bidders for exclusive talks shortly.
They said the purchase price for the company, owned chiefly by founder Carlo Koelzer and equity investment funds Summit Partners and Brockhaus, was likely to rise to 650-750 million euros ($711.10 million to $820.50 million) from earlier industry estimates of 500-600 million euros. "For CME, it would be a big step to increase its footprint in Europe," one of the industry sources said on Friday. "So they should be able to pay a high strategic premium." All three companies declined to comment.
Reuters had already reported last month that Deutsche Boerse was considering a bid for the company and industry commentators had raised the prospect of US-based CME or Nasdaq bidding. With volatility, volumes and resulting returns booming in the dollar's dramatic rally over the past year, currency trading is attracting more attention and investment from banks, retail trading houses and investors. Deutsche Boerse's Eurex and other major exchange groups, including CME, have been positioning themselves to take a role in what they expect with time will be a more heavily regulated market.
But those efforts have focused largely on more complicated instruments like options and futures rather than the spot currency transactions that make up the $5 trillion a day market and in which 360T is one of the biggest non-bank players. Koelzer is credited a decade ago with helping launch the new generation of multi-bank, multi-user platforms which allowed European companies to pick and choose in one place which banks they traded currencies with. Data from industry publisher Euromoney shows 360T is now the third-largest such platform, behind Thomson Reuters-owned FXAll, FX Connect and just ahead of Bloomberg.