“It is the board’s judgment that combining the timing of the demutualisation and IPO would be in the best interest of CBOE owners,” chief executive Bill Brodsky told the exchange’s members. “Subject to a member vote in favour of demutualisation, our goal is to complete both the demutualisation and the IPO by the end of the second quarter of 2010.”

The bourse said all shares issued would be common stock of CBOE Holdings, the exchange’s parent company. Brodsky said the IPO proceeds would be used for “general corporate purposes”. These would include buying back shares issued to CBOE members in the demutualisation and issued to members of the settlement class who received stock under the settlement agreement.

A demutualisation and subsequent IPO has been a long term target of the exchange – an aim that was made possible only by its settlement of a legal dispute with members of the Chicago Board of Trade who were holding out for an equity stake in the exchange on the grounds that they owned exercise rights to seats there. The final settlement of the dispute was approved by the Delaware Supreme Court on November 30.

In December 2008 CBOE reached agreement with most of the CBOT members, under which they would receive $300m plus an 18% equity stake in the options bourse. The agreement was approved by a Delaware Chancery Court in June 2009 but some CBOT members have still maintained that it undervalued their membership.

In the latest final settlement in early December CBOE agreed to pay a total of $4.2m to resolve all appeals. CME Group, which now owns CBOT, will reimburse the US options exchange half of this amount.