The Wall Street Journal: BATS Global Markets to try again for IPO

BATS Global Markets Inc. wants a second chance to make a first impression.

More than 3 1/2 years after a software glitch caused the exchange operator to cancel its IPO, BATS is planning to file a new prospectus with the Securities and Exchange Commission as early as December with a view toward going public in the second quarter of 2016, according to people familiar with the matter.

The company’s equity is valued at about $1.5 billion, but BATS could seek to sell shares at a higher value in the IPO, the people said. With debt, the company is valued at more than $2 billion. Morgan Stanley and Citigroup Inc. — the same banks that led its IPO in 2012 — have been tapped to lead a group of banks to work on the offering, the people said.

BATS plans to return to where everything went wrong the first time. Though they considered listing on markets run by the New York Stock Exchange and Nasdaq Inc., BATS executives now expect to launch the IPO on the company’s own exchange, the people said. This time, executives are planning extensive testing beforehand to avoid a repeat of 2012.

Based in Lenexa, Kan., BATS has transformed as a company since 2012. After merging with rival exchange Direct Edge Holdings in 2014, it has consistently been the second-biggest exchange operator in the U.S. and the largest in Europe by market volume. It has made a foray into foreign-currency trading and gained a stronger foothold in the options market. Lately it has trained its sights on the growing market for exchange-traded funds with changes designed to convince ETF sponsors to move their listings to BATS. Last week, ProShares switched four of its ETFs over to BATS from NYSE.

An extended version of this report appears at WSJ.com.

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