China economy

Two Chinese bidders for Chicago Stock Exchange said to have dropped out

Just one China-based company now left in buyers group, with US approval of deal still pending

PUBLISHED : Saturday, 14 October, 2017, 6:09pm
UPDATED : Saturday, 14 October, 2017, 6:09pm

Two of the three China-based bidders for the Chicago Stock Exchange have withdrawn from the group trying to acquire the market, according to a person familiar with the matter.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 and Chongqing Longshang Decoration Co are pulling out of the deal, the person, who asked not to be identified discussing private negotiations, said. That leaves Chongqing Casin Enterprise Group Co plus several US entities in the buyers group.

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

The US Securities and Exchange Commission 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.

China to step up supervision of overseas investment risks, insurance regulator says

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

US President Donald Trump railed against the deal on the campaign trail last year. A group including Representative Robert Pittenger, a Republican from North Carolina, and Senator Joe Manchin, a Democrat from West Virginia, 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 by the Committee on Foreign Investment in the US, which reviews the national security risks of overseas takeovers.

Overseas real estate and soccer clubs in crosshairs as China ramps up investment clampdown

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, according to the person familiar with the matter.

Under the current plan, Casin, the group’s lead investor, is trying to buy 20 per cent of the company, which handles less than 1 per cent 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The Wall Street Journal reported earlier that Chongqing Jintian and Chongqing Longshang had withdrawn.