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* CBOE may launch $5 bln IPO -WSJ

* Report follow litigation settlement

* CBOE no comment on report, board meeting Dec. 10

(Adds comments from seat owner in paragraph 9)

CHICAGO, Dec 2 (Reuters) – The Chicago Board Options
Exchange could launch an initial public offering by May
following a recent settlement of a protracted legal dispute,
according to the Wall Street Journal.

The report, citing a person close to the discussions, said
the IPO would value the CBOE at an estimated $5 billion.

A CBOE spokesman declined on Wednesday to comment on the
report.

CBOE said late on Monday that it settled litigation over
ownership rights, paving the way for the largest U.S. options
market to consider going public or merge with another company.
[ID:nN01495900].

The settlement would help the CBOE change into a
demutualized, for-profit shareholder company from a membership
organization.

CBOE’s board of directors is expected to discuss its future
at a Dec. 10 meeting, the newspaper report said.

CBOE confirmed a board meeting is scheduled on that day but
declined to give further details.

In October, a media report said CME Group (CME.O), the
world’s largest derivatives exchanges operator, was in informal
talks to buy CBOE, which is still the largest independent
exchange in North America. [ID:nN19371505].

Brendan Caldwell, president and chief executive of Caldwell
Investment Management Ltd in Toronto, which has 49 CBOE seats
in various funds and vehicles, said CBOE management is looking
for the best result for its seat owners.

“As far as I know there is no predetermined time to have a
public offering. What excites me is that an IPO is actually
possible,” he said.

This decade a number of exchange operators such as NYSE
Euronext (NYX.N), which runs the New York Stock Exchange, have
demutualized and gone public. Others such as energy and metals
exchange NYMEX — now part of CME — have ultimately opted to
be acquired.

A U.S. stock market rally since March has revived the
market for U.S.-listed IPOs. There have been 46 IPOs since
February, following a six-month period during which only one
IPO was priced.

(Reporting by Doris Frankel; Editing by Andrew Hay)
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