June 9, 2000

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Chicago Tribune

VENTURE INVESTMENT IN
LIFFE MAY BE SPARK FOR
CHICAGO EXCHANGES 

By George Gunset 
Tribune Staff Writer 

In a deal that could encourage the evolution of Chicago's
major exchanges into publicly traded companies, the
London International Financial Futures Exchange said
Thursday it has attracted some $90 million in venture
capital.

The all-electronic exchange, known as LIFFE, said the
funds would be used for technology to develop its
trading business and e-commerce opportunities. The
investors, Boston-based Battery Ventures and the New
York-based Blackstone Group, will own between 25
percent and 38 percent of LIFFE stock.

"This injection of capital shows what some very
sophisticated investors think about the potential of
electronic futures exchanges," said Richard Sandor, one
of the original architects of financial futures in Chicago.
He will join the LIFFE board next month as a public
director.

With the investors paying a 30 percent premium over the
price of LIFFE stock, Sandor said, "The example could
help speed up the process of demutualization at the
Chicago Board of Trade and push the Chicago
Mercantile Exchange more quickly toward an initial
public offering of stock."

Merc members on Wednesday overwhelmingly voted to
transform the exchange into a for-profit stock company.
Exchange officials have indicated that an IPO will be
considered at a later date.

The CBOT's restructuring plan has been slowed in part
by complicated negotiations over trading rights at the
Chicago Board Options Exchange, which the CBOT
founded in 1973. A membership vote has been
scheduled for June 28.