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TABLE OF CONTENTS

Table of Contents

Filed Pursuant to Rule 424(b)(5)
Registration Statement No. 333-215401


CALCULATION OF REGISTRATION FEE

               
 
Title of each class of securities
to be registered

  Amount to be
registered

  Proposed maximum
offering price per
security

  Proposed maximum
aggregate offering
price

  Amount of
registration fee(1)

 

3.650% Senior Notes due 2027

  $650,000,000   99.759%   $648,433,500   $75,153.44

 

(1)
This filing fee is calculated in accordance with Rule 457(r) of the Securities Act of 1933, as amended.

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PROSPECTUS    SUPPLEMENT
(To prospectus dated January 3, 2017)

$650,000,000

LOGO

CBOE Holdings, Inc.

3.650% Senior Notes due 2027



                  We are offering $650,000,000 aggregate principal amount of 3.650% Senior Notes due 2027 (the "notes"). We will pay interest on the notes on January 12 and July 12 of each year, commencing on July 12, 2017. The notes will mature on January 12, 2027.

                  Pursuant to an Agreement and Plan of Merger, dated as of September 25, 2016 (the "Merger Agreement"), by and among CBOE Holdings, Inc., Bats Global Markets, Inc. ("Bats"), CBOE Corporation and CBOE V, LLC, subject to the receipt of required regulatory approvals and satisfaction of customary closing conditions, we will acquire Bats in a series of successive merger transactions (the "merger"). Following the consummation of the merger, Bats will become an indirect wholly owned subsidiary of CBOE Holdings (the "Acquisition"). We intend to use a portion of the net proceeds from this offering to fund, in part, the Acquisition, including the payment of related fees and expenses and the repayment of Bats' existing indebtedness, and the remainder for general corporate purposes. See "Use of Proceeds."

                  The notes will be subject to a special mandatory redemption in the event that the Acquisition is not consummated on or prior to October 23, 2017 or, if prior to October 23, 2017, the Merger Agreement is terminated, subject to certain conditions. In such an event, the notes will be redeemed at a price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the special mandatory redemption date. See "Description of Notes—Special Mandatory Redemption."

                  We have the option to redeem some or all of the notes at any time and from time to time at the redemption prices described under the heading "Description of Notes—Optional Redemption." If a change of control triggering event occurs as described in this prospectus supplement, we may be required to offer to purchase the notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. See "Description of Notes—Change of Control."

                  The notes will be our senior unsecured obligations and will rank equally in right of payment with all our other existing and future senior unsecured debt from time to time outstanding, but will be effectively junior to our secured indebtedness, to the extent of the value of the assets securing such indebtedness, and will not be the obligation of any of our subsidiaries. The notes will be issued in fully registered form in denominations of $2,000 and in integral multiples of $1,000 in excess thereof.

                  We do not intend to apply to list the notes on any securities exchange or to have the notes quoted on any automated quotation system. There is currently no public market for the notes and we cannot provide any assurances that an active public market for the notes will develop or be maintained.

                  Investing in the notes involves risks. See "Risk Factors" beginning on page S-13 of this prospectus supplement for a description of the factors you should consider before deciding to invest in the notes.

 
  Per Note   Total  

Public offering price(1)

    99.759 % $ 648,433,500  

Underwriting discount

    0.650 % $ 4,225,000  

Proceeds (before expenses) to us(1)

    99.109 % $ 644,208,500  

(1)
Plus accrued interest, if any, from January 12, 2017, if settlement occurs after that date.

                  Neither the Securities and Exchange Commission, any state securities commission or any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.

                  The notes will be ready for delivery in book-entry form only through the facilities of The Depository Trust Company for the accounts of its participants, including Euroclear Bank, S.A./N.V. and Clearstream Banking S.A., on or about January 12, 2017.



Joint Book-Running Managers

BofA Merrill Lynch   Morgan Stanley

Citigroup

 

J.P. Morgan



Co-Managers

PNC Capital Markets LLC   US Bancorp           Wells Fargo Securities

Deutsche Bank Securities

 

Huntington Investment Company

 

Loop Capital Markets

   

The date of this prospectus supplement is January 9, 2017.


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TABLE OF CONTENTS

Prospectus Supplement

 
  Page  

Summary

    S-1  

Risk Factors

    S-13  

Use of Proceeds

    S-22  

Capitalization

    S-23  

Unaudited Pro Forma Condensed Combined Financial Statements

    S-24  

Description of Certain Other Indebtedness

    S-38  

Description of Notes

    S-40  

Material United States Federal Income Tax Considerations

    S-58  

Certain ERISA Considerations

    S-63  

Underwriting

    S-66  

Legal Matters

    S-71  

Experts

    S-71  

Where You Can Find More Information

    S-71  


Prospectus

 
  Page  

The Company

    1  

Risk Factors

    2  

Use of Proceeds

    2  

Ratio of Earnings To Fixed Charges

    2  

Description of Debt Securities

    3  

Plan of Distribution

    16  

Legal Matters

    16  

Experts

    16  

Where You Can Find More Information

    16  


ABOUT THIS PROSPECTUS SUPPLEMENT

              We provide information to you about this offering in two separate documents. The accompanying prospectus provides general information about us and the debt securities we may offer from time to time, some of which may not apply to this offering. This prospectus supplement describes the specific details regarding this offering and the notes offered hereby. Additional information is incorporated by reference in this prospectus supplement. See "Where You Can Find More Information." If information in this prospectus supplement is inconsistent with the accompanying prospectus, you should rely on this prospectus supplement.

              We have not authorized anyone to provide you with information other than, and you should rely only on, the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus, any related free writing prospectus we authorize that supplements this prospectus supplement, and the other information to which we refer you. We take no responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. You should not assume that the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus or any document incorporated by reference is accurate as of any date other than the date of the applicable document. Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus supplement does not constitute an offer to sell or a solicitation of an offer to buy any notes by anyone in any jurisdiction in

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which such offer or solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

              Neither this prospectus supplement nor the accompanying prospectus is a prospectus for the purposes of the Prospectus Directive (as defined below). This prospectus supplement and the accompanying prospectus have been prepared on the basis that any offer of notes in any Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State") will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of notes. Accordingly any person making or intending to make an offer in that Relevant Member State of notes which are the subject of the offering contemplated in this prospectus supplement and the accompanying prospectus may only do so in circumstances in which no obligation arises for us or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive in relation to such offer. Neither we nor the underwriters have authorized, nor do we or they authorize, the making of any offer of notes in circumstances in which an obligation arises for us or them to publish a prospectus for such offer. Neither we nor the underwriters have authorized, nor do we or they authorize, the making of any offer of notes through any financial intermediary, other than offers made by the underwriters, which constitute the final placement of the notes contemplated in this prospectus supplement and the accompanying prospectus. The expression "Prospectus Directive" means Directive 2003/71/EC (as amended), and includes any relevant implementing measure in the Relevant Member State.

              This prospectus supplement, the accompanying prospectus and any other document or materials relating to the issue of notes offered hereby are for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Financial Promotion Order, (iii) are outside the United Kingdom or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This prospectus supplement and the accompanying prospectus and any of their contents are directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this prospectus supplement and the accompanying prospectus relate is available only to relevant persons and will be engaged in only with relevant persons.

              As used in this prospectus supplement, unless stated otherwise or the context requires otherwise, "CBOE Holdings," the "Company," "we," "us" and "our" refer to CBOE Holdings, Inc. and its consolidated subsidiaries.


FORWARD-LOOKING STATEMENTS

              This prospectus supplement and the documents incorporated and deemed to be incorporated by reference in this prospectus supplement, the accompanying prospectus and related free writing prospectus contain or may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend these forward-looking statements to be covered by the safe harbor provisions for such statements. These statements can sometimes be identified by forward-looking words such as "may," "might," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," and the negative of these terms and other comparable terminology. All statements that reflect our expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements. These forward-

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looking statements, which are subject to known and unknown risks, uncertainties and assumptions, may include projections of our future financial performance based on our growth strategies, anticipated trends in our business and effects of the Acquisition. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from that expressed or implied by the forward-looking statements.

              While we believe we have identified the risks that are material to us, these risks and uncertainties are not exhaustive. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

              Some factors that could cause actual results to differ include:

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              In addition, if the Acquisition is consummated, the following factors may cause our actual results to differ materially from those in forward-looking statements:

              We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this prospectus supplement. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections. For a further description of these and other risks, see the information described below under the heading "Risk Factors."

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SUMMARY

              The following summary information is qualified in its entirety by the information contained elsewhere in this prospectus supplement and the accompanying prospectus, including the documents we have incorporated by reference, and in the indenture as described under "Description of Notes." Because this is a summary, it does not contain all the information that may be important to you. Before making an investment decision, we urge you to carefully read this entire prospectus supplement, the accompanying prospectus and the information incorporated by reference, including the consolidated financial statements of CBOE Holdings and Bats and the accompanying notes and the information described or referred to under "Risk Factors."

CBOE Holdings

              CBOE Holdings is the holding company for Chicago Board Options Exchange, Incorporated ("CBOE"), CBOE Futures Exchange, LLC ("CFE"), C2 Options Exchange, Incorporated ("C2") and other subsidiaries. CBOE Holdings' principal business is operating markets that offer for trading options on various market indexes, mostly on an exclusive basis, and futures contracts, as well as trading options on non-exclusive "multiply-listed" options, such as options on the stocks of individual corporations and options on other exchange-traded products, such as exchange-traded funds and exchange-traded notes. CBOE Holdings operates three stand-alone exchanges, but reports the results of its operations in one reporting segment.

              CBOE is the primary options market of CBOE Holdings and offers trading in listed options through a single system that integrates electronic trading and traditional open outcry trading on the trading floor in Chicago. This integration of electronic trading and traditional open outcry trading into a single exchange is known as the Hybrid trading model. CFE, the all-electronic futures exchange of CBOE Holdings, offers trading in futures on the VIX volatility index and other products. C2 is the all-electronic exchange of CBOE Holdings that also offers trading in listed options and may operate with a different market model and fee structure than CBOE. All of these exchanges operate on a proprietary technology platform known as CBOE Command.

              Since 1974, the first full year of trading on CBOE, CBOE Holdings has grown from 5.6 million contracts on one exchange to 1.2 billion contracts on three exchanges in 2015.

The Pending Acquisition

              On September 25, 2016, CBOE Holdings, certain subsidiaries of CBOE Holdings and Bats entered into the Merger Agreement pursuant to which we have agreed to acquire Bats (which we refer to as the "Acquisition") in a cash and stock transaction valued at approximately $32.50 per Bats share, or a total of approximately $3.2 billion, consisting of 31% cash and 69% CBOE Holdings stock, based on CBOE Holdings' closing stock price of $70.30 per share on September 23, 2016, the last full day of trading prior to the announcement of the Merger Agreement. The parties' obligations to complete the Acquisition are conditioned upon approval of the issuance of shares of CBOE Holdings common stock pursuant to the Merger Agreement by the holders of the outstanding shares of CBOE Holdings common stock, approval of the Merger Agreement by the holders of the outstanding shares of Bats common stock, the receipt of required regulatory approvals and certain other customary closing conditions. Consummation of the Acquisition is not subject to a financing condition. On December 15, 2016, CBOE Holdings and Bats began mailing the definitive joint proxy statement/prospectus to their respective stockholders in connection with the special meeting of stockholders called to vote on the approval of the Acquisition, which is scheduled to be held on January 17, 2017.

              We intend to finance the Acquisition, including the payment of related fees and expenses, as well as the repayment of Bats' existing indebtedness, with new long-term debt and the net proceeds from this offering. In connection with entering into the Merger Agreement, we entered into a

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commitment letter relating to a $1.65 billion senior unsecured 364-day bridge loan facility. In lieu of entering into the bridge facility, we intend to issue the notes in this offering and borrow under our new $1.0 billion delayed draw term loan facility. See "Description of Certain Other Indebtedness" and "Use of Proceeds."

              Bats is a leading global operator of securities exchanges and other electronic markets enabled by world-class technology. Bats provides trade execution, market data, trade reporting, connectivity and risk management solutions to brokers, market makers, asset managers and other market participants, ultimately benefiting retail and institutional investors across multiple asset classes. Bats' principal objective is to improve markets by maximizing efficiency and mitigating trade execution risk for market participants. Bats' asset class focus is comprised of listed cash equity securities in the United States and Europe, listed equity options in the United States and certain foreign exchange products, or "FX," globally as well as exchange-traded products, including exchange-traded funds in the United States and Europe. For the nine months ended September 30, 2016, trade execution comprised 44.2% of Bats' revenues less cost of revenues, and market data and connectivity, or "non-transaction revenues," comprised 55.8% of Bats' revenues less cost of revenues.

              Bats is required to file periodic reports and other information with the SEC. Copies of these reports and other information regarding Bats may be inspected and copied at the SEC's Public Reference Room or website as specified under "Where You Can Find More Information." However, such reports and other information are not incorporated by reference in this prospectus supplement.

              CBOE Holdings was incorporated in the State of Delaware in August 2006. Our principal executive offices are located at 400 South LaSalle Street, Chicago, Illinois 60605, and our telephone number is (312) 786-5600. Our website is www.cboe.com. Information contained on or accessible through our website is not a part of this prospectus supplement or the accompanying prospectus, other than documents that we file with the SEC and incorporate by reference into this prospectus supplement and the accompanying prospectus. For additional information concerning CBOE Holdings, please see our Annual Report on Form 10-K for the year ended December 31, 2015, our quarterly reports on Form 10-Q for the quarters ended March 31, 2016, June 30, 2016 and September 30, 2016 and our other filings with the SEC, which are incorporated by reference into this prospectus supplement. See "Where You Can Find More Information."

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The Offering

Issuer   CBOE Holdings, Inc., a Delaware corporation.

Securities offered

 

$650 million aggregate principal amount of 3.650% Senior Notes due 2027.

Maturity date

 

The notes will mature on January 12, 2027.

Interest payment dates

 

We will pay interest on the notes on January 12 and July 12 of each year, commencing on July 12, 2017.

Interest rate

 

The notes will bear interest at 3.650% per year.

Optional redemption

 

We may redeem the notes, in whole or in part, at any time and from time to time prior to the date that is three months prior to their maturity date at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus the applicable premium and accrued and unpaid interest, if any, to, but excluding, the date of redemption. See "Description of Notes—Optional Redemption."

 

 

If the notes are redeemed on or after the date that is three months prior to their maturity date, the notes will be redeemed at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.

Special mandatory redemption

 

The notes will be subject to a special mandatory redemption in the event that the Acquisition is not consummated on or prior to October 23, 2017 or, if prior to October 23, 2017, the Merger Agreement is terminated other than in connection with the consummation of the Acquisition and is not otherwise amended or replaced. In such an event, the notes will be redeemed at a price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the special mandatory redemption date. See "Description of Notes—Special Mandatory Redemption."

Change of control offer

 

If we experience a "Change of Control Triggering Event" (as defined in "Description of Notes—Change of Control"), we will be required, unless (1) we have exercised our option to redeem the notes in whole or (2) the conditions to a special mandatory redemption shall have occurred, to offer to repurchase the notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. See "Description of Notes—Change of Control."

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Certain covenants   The indenture governing the notes will contain certain restrictions, including a limitation that restricts our ability and the ability of certain of our subsidiaries to create or incur secured debt. Certain sale and leaseback transactions are similarly limited. See "Description of Notes—Certain Restrictive Covenants."

Ranking

 

The notes will be our senior unsecured obligations, will rank equally in right of payment with all our other existing and future senior unsecured debt, including all other unsubordinated notes issued under the indenture, from time to time outstanding, will be effectively junior to our secured indebtedness, to the extent of the value of the assets securing such indebtedness, and will be structurally subordinated to the secured and unsecured debt of our subsidiaries. The notes will be exclusively our obligation, and not the obligation of any of our subsidiaries. Our rights and the rights of any holder of notes (or other of our creditors) to participate in the assets of any subsidiary upon that subsidiary's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors, except to the extent that we may be a creditor with recognized claims against the subsidiary. See "Description of Notes—Ranking."

Form and denomination

 

The notes will be issued in fully registered form in denominations of $2,000 and in integral multiples of $1,000 in excess thereof.

DTC eligibility

 

The notes will be represented by global certificates deposited with, or on behalf of, The Depository Trust Company, or its nominee. See "Description of Notes—Book-Entry System."

Use of proceeds

 

We expect to receive net proceeds, after deducting underwriting discounts and estimated offering expenses, of approximately $643 million from this offering. We intend to use a portion of the net proceeds from this offering to fund, in part, the Acquisition, including the payment of related fees and expenses and the repayment of Bats' existing indebtedness, and the remainder for general corporate purposes. See "Use of Proceeds."

No listing of the notes

 

We do not intend to apply to list the notes on any securities exchange or to have the notes quoted on any automated quotation system.

Governing law

 

The indenture and the notes will be governed by the laws of the State of New York.

Trustee, registrar and paying agent

 

Wells Fargo Bank, National Association.

Risk factors

 

See "Risk Factors" and other information in this prospectus supplement and the accompanying prospectus for a discussion of factors that should be carefully considered before investing in the notes.

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Ratio of Earnings to Fixed Charges

              Our ratio of earnings to fixed charges for each of the periods indicated is set forth below. The information set forth below should be read together with CBOE Holdings' financial statements and the accompanying notes incorporated by reference into this prospectus supplement. See "Where You Can Find More Information."

 
  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
  2016   2015   2014   2013   2012   2011  

Ratio of earnings to fixed charges(1)

    964.8x     7,497.0x     (3 )   (3 )   (3 )   275.9x  

Pro forma ratio of earnings to fixed charges(1)(2)

    9.6x     8.7x                          

(1)
The ratio of earnings to fixed charges equals earnings divided by fixed charges. Earnings is defined as the amount resulting from adding and subtracting the following items. Add the following: (a) pre-tax income from continuing operations before adjustment for income or loss from equity investees; (b) fixed charges; (c) amortization of capitalized interest; (d) distributed income of equity investees; and (e) the portion of pre-tax losses of equity investees attributable to CBOE Holdings for which charges arising from guarantees are included in fixed charges. From the total of the added items, subtract the following: (a) interest capitalized; (b) preference security dividend requirements of consolidated subsidiaries; and (c) the noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges. Fixed charges are defined as the sum of the following: (a) interest expensed and capitalized; (b) amortized premiums, discounts and capitalized expenses related to indebtedness; (c) an estimate of the interest within rental expense; and (d) preference security dividend requirements of consolidated subsidiaries.

(2)
Gives effect to the Acquisition and related financing transactions. The pro forma ratio of earnings to fixed charges should be read together with the pro forma financial statements and the accompanying notes included elsewhere in this prospectus supplement. See "Unaudited Pro Forma Condensed Combined Financial Statements."

(3)
There were no fixed charges for the years ended December 2014, 2013 and 2012.

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Summary Selected Historical Consolidated Financial Data for CBOE Holdings

              The following tables set forth the summary selected historical consolidated financial data for CBOE Holdings and its consolidated subsidiaries. The summary selected consolidated financial data as of December 31, 2015 and for the years ended December 31, 2015, 2014 and 2013 have been derived from CBOE Holdings' audited consolidated financial statements and related notes contained in its Annual Report on Form 10-K for the year ended December 31, 2015, which are incorporated by reference into this prospectus supplement. The summary selected consolidated financial data as of September 30, 2016 and for the nine months ended September 30, 2016 and 2015 have been derived from CBOE Holdings' unaudited condensed consolidated financial statements and related notes contained in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016, which is incorporated by reference into this prospectus supplement. The results for the nine months ended September 30, 2016 and 2015 are not necessarily indicative of the results that may be expected for the entire fiscal year. CBOE Holdings' unaudited interim financial statements reflect all adjustments that management of CBOE Holdings considers necessary for the fair presentation of CBOE Holdings' financial position and results of operations as of September 30, 2016 and for the nine months ended September 30, 2016 and 2015 in accordance with United States generally accepted accounting principles ("GAAP"). Historical results are not necessarily indicative of the results that may be expected for any future period.

              This summary selected historical consolidated financial data should be read in conjunction with CBOE Holdings' audited consolidated financial statements, the notes related thereto and the related "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in CBOE Holdings' Annual Report on Form 10-K for the year ended December 31, 2015 and CBOE Holdings' unaudited condensed consolidated financial statements, the notes related thereto and the related "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in CBOE Holdings' Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016. See "Where You Can Find More Information."

 
  Nine Months Ended
September 30,
  Year Ended December 31,  
 
  2016   2015   2015   2014   2013  
 
  (in thousands, except per share data)
 

Income Statement Data:

                               

Total operating revenues

  $ 481,866   $ 478,599   $ 634,545   $ 617,225   $ 572,050  

Total operating expenses

    258,768     234,565     314,617     303,424     286,236  

Operating income

    223,098     244,034     319,928     313,801     285,814  

Total other income (expense)

    8,519     326     4,096     (4,104 )   (2,158 )

Income before income taxes

    231,617     244,360     324,024     309,697     283,656  

Income tax provision

    91,059     89,739     119,001     119,983     107,657  

Net income

  $ 140,558   $ 154,621   $ 205,023   $ 189,714   $ 175,999  

Net income allocated to common stockholders

  $ 139,974   $ 153,945   $ 204,125   $ 188,392   $ 173,863  

Net income per share allocated to common stockholders

                               

Basic

  $ 1.72   $ 1.85   $ 2.46   $ 2.21   $ 1.99  

Diluted

    1.72     1.85     2.46     2.21     1.99  

Cash dividends declared per share(1)

    0.71     0.65     0.88     0.78     1.16  

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  As of
September 30,
  As of
December 31,
 
 
  2016   2015  
 
  (in thousands)
 

Balance Sheet Data:

             

Total assets

  $ 441,342   $ 384,788  

Total liabilities

    139,177     125,143  

Redeemable noncontrolling interests

    12,600      

Total stockholders' equity

    289,565     259,645  

 

 
  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
  2016   2015   2015   2014   2013  
 
  (in thousands)
 

Average daily volume by product:(2)

                               

Equities

    1,430     1,602     1,559     1,939     1,721  

Indexes

    1,712     1,645     1,620     1,613     1,479  

Exchange-trade products

    1,268     1,341     1,274     1,507     1,353  

Total options average daily volume

    4,410     4,588     4,453     5,059     4,553  

Futures

    240     211     205     201     159  

Total average daily volume

    4,650     4,799     4,658     5,260     4,712  

(1)
On December 10, 2013, the CBOE Holdings board declared a special cash dividend of $0.50 per share. This was in addition to CBOE Holdings' quarterly cash dividends, which aggregated to $0.66 per share for the year ended December 31, 2013.

(2)
Average daily volume equals the total contracts traded during the period divided by the number of trading days in the period.

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Summary Selected Historical Consolidated Financial Data for Bats

              The following tables set forth the summary selected historical consolidated financial data for Bats and its consolidated subsidiaries. The summary selected consolidated financial data as of December 31, 2015 and 2014 and for the fiscal years ended December 31, 2015, 2014 and 2013 have been derived from Bats' audited consolidated financial statements and related notes, which are incorporated by reference into this prospectus supplement. The summary selected consolidated financial data as of September 30, 2016 and for the nine months ended September 30, 2016 and 2015 have been derived from Bats' unaudited condensed consolidated financial statements and related notes for the quarterly period ended September 30, 2016, which are incorporated by reference into this prospectus supplement. The results for the nine months ended September 30, 2016 and 2015 are not necessarily indicative of the results that may be expected for the entire fiscal year. Bats' unaudited interim financial statements reflect all adjustments that management of Bats considers necessary for the fair presentation of Bats' financial position and results of operations as of September 30, 2016 and for the nine months ended September 30, 2016 and 2015 in accordance with GAAP. Historical results are not necessarily indicative of the results that may be expected for any future period.

              This summary selected consolidated financial data should be read in conjunction with Bats' audited consolidated financial statements and the notes related thereto and Bats' unaudited condensed consolidated financial statements and the notes related thereto, each of which is incorporated by reference into this prospectus supplement. See "Where You Can Find More Information."

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  Nine Months Ended
September 30,
  Year Ended December 31,  
 
  2016   2015   2015   2014   2013  
 
  (in millions, except per share data)
 

Consolidated Statements of Operations Data:

                               

Revenues:

                               

Transaction fees

  $ 1,011.1   $ 970.1   $ 1,290.2   $ 1,009.9   $ 612.8  

Regulatory transaction fees(1)

    222.8     207.0     275.7     272.0     127.4  

Market data fees

    110.1     99.4     131.0     110.3     59.4  

Connectivity fees and other

    74.4     58.7     81.8     66.0     41.9  

Total revenues

    1,418.4     1,335.2     1,778.7     1,458.2     841.5  

Cost of revenues:

                               

Liquidity payments

    832.5     805.7     1,070.7     831.4     474.7  

Section 31 fees(1)

    222.8     207.0     275.7     272.0     127.4  

Routing and clearing

    32.6     36.7     47.9     47.3     42.6  

Total cost of revenues

    1,087.9     1,049.4     1,394.3     1,150.7     644.7  

Revenues less cost of revenues

    330.5     285.8     384.4     307.5     196.8  

Operating expenses:

                               

Compensation and benefits

    68.7     58.4     79.7     87.0     41.5  

Depreciation and amortization

    31.2     28.5     40.8     28.4     15.2  

Systems and data communication

    13.5     21.4     27.2     23.5     9.6  

Occupancy

    2.1     2.4     3.1     4.2     1.9  

Professional and contract services

    10.5     8.9     11.1     6.5     8.1  

Regulatory costs

    8.6     8.6     11.1     12.1     5.4  

Change in fair value of contingent consideration liability

    2.2     1.7     2.8          

Impairment of assets

                    3.5  

General and administrative

    17.8     20.9     26.3     26.2     10.0  

Total operating expenses

    154.6     150.8     202.1     187.9     95.2  

Operating income

    175.9     135.0     182.3     119.6     101.6  

Interest (expense) income, net

    (29.9 )   (34.2 )   (46.6 )   (27.3 )   (25.8 )

Loss on extinguishment of debt

    (17.6 )           (13.6 )    

Equity in earnings in EuroCCP

    1.2     1.0     1.2     1.1      

Other income (expense)

    0.2     1.6     1.8     0.5     (0.2 )

Income before income tax provision

    129.8     103.4     138.7     80.3     75.6  

Income tax provision

    53.3     42.9     56.5     31.1     28.8  

Net income

  $ 76.5   $ 60.5   $ 82.2   $ 49.2   $ 46.8  

Earnings per share:

                               

Basic

  $ 0.81   $ 0.64   $ 0.87   $ 0.53   $ 0.71  

Diluted

  $ 0.79   $ 0.64   $ 0.87   $ 0.53   $ 0.71  

Weighted average shares outstanding:

                               

Basic

    94.8     94.5     94.6     92.2     66.0  

Diluted

    96.4     95.2     95.0     92.7     66.3  

Distributions per share

  $ 0.08   $   $   $ 2.69   $  

(1)
As national securities exchanges, Bats BZX Exchange, Inc. ("BZX"), Bats BYX Exchange, Inc. ("BYX"), Bats EDGX Exchange, Inc. ("EDGX") and Bats EDGA Exchange, Inc. ("EDGA") are assessed fees pursuant to Section 31 of the Exchange Act. Section 31 fees are assessed on the notional value traded and are designed to recover the costs to the government of supervision and regulation of securities markets and securities professionals. Section 31 fees are paid directly to the SEC, and our national securities exchanges then pass these costs along to our members as regulatory transaction fees, recognizing these amounts as incurred in cost of revenues and revenues, respectively.

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  As of
September 30,
  As of
December 31,
 
 
  2016   2015  
 
  (in millions)
 

Consolidated Statements of Financial Condition Data:

             

Total assets

  $ 1,217.7   $ 1,307.0  

Total liabilities

    782.9     927.1  

Stockholders' equity

    434.8     379.9  

 

 
  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
  2016   2015   2015   2014   2013  
 
  (in millions except for trading days, earnings per
share, percentages and as noted below)

 

U.S. Equities:

                               

Average daily volume ("ADV") (in billions of shares):

                               

Matched shares

    1.6     1.5     1.5     1.2     0.6  

Routed shares

            0.1     0.1     0.1  

Total touched shares

    1.6     1.5     1.6     1.3     0.7  

Market ADV

    7.4     6.9     6.9     6.4     6.2  

Number of trading days

    189     188     252     252     252  

Net capture per one hundred touched shares(1)

  $ 0.021   $ 0.021   $ 0.021   $ 0.022   $ 0.024  

Market share(2)

    20.8 %   21.1 %   21.1 %   19.4 %   10.4 %

European Equities:

                               

Average daily notional value ("ADNV") (in billions):

                               

Matched and touched

  10.8   12.7   12.4   8.6   7.5  

Market ADNV

  46.6   52.4   50.8   39.7   32.6  

Number of trading days

    193     192     257     256     256  

Net capture per matched notional value (in basis points)(1)

    0.150     0.132     0.133     0.162     0.167  

Market share(2)

    23.2 %   24.2 %   24.4 %   21.6 %   23.1 %

U.S. Options:

                               

ADV (in millions of contracts):

                               

Matched contracts

    1.7     1.6     1.5     0.8     0.6  

Routed contracts

            0.1          

Total touched contracts

    1.7     1.6     1.6     0.8     0.6  

Market ADV

    15.8     16.3     16.1     16.6     15.9  

Number of trading days

    189     188     252     252     252  

Net capture per touched contract(1)

  $ 0.053   $ 0.024   $ 0.030   $ 0.046   $ 0.058  

Market share(2)

    11.0 %   9.9 %   9.6 %   4.8 %   3.7 %

Global FX:

                               

ADNV (in billions)

  $ 27.0   $ 26.9   $ 25.8       *     *

Number of trading days

    195     144     209       *     *

Net capture per one million dollars traded(1)

  $ 2.68   $ 3.00   $ 2.95       *     *

(1)
"Net capture per one hundred touched shares" refers to annual transaction fees less liquidity payments and routing and clearing costs divided by the product of one-hundredth ADV of touched shares on BZX, BYX, EDGX and EDGA and the number of trading days.

"Net capture per matched notional value" refers to annual transaction fees less liquidity payments in British pounds divided by the product of ADNV in British pounds of shares matched on Bats Trading Limited (a U.K. operator of Bats' multilateral trading facility and

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    Bats' Regulated Market, under its Recognised Investment Exchange status, which is referred to as "Bats Europe") and the number of trading days.

      "Net capture per touched contract" refers to annual transaction fees less liquidity payments and routing and clearing costs divided by the product of ADV of touched contracts and the number of trading days.

      "Net capture per one million dollars traded" refers to annual transaction fees less liquidity payments, if any, divided by the product of one thousandth of ADNV traded on the Bats Hotspot FX market and the number of trading days, divided by two, which represents the buyer and seller that are both charged on the transaction.

(2)
"market share," "share of the market" or "share of trading" with respect to:

(i)
the U.S. equity market or specific securities in such market, such as NASDAQ-or NYSE-listed securities, during any period, means the number of shares of such U.S. listed cash equity securities and exchange-traded products ("ETPs") that were matched on BZX, BYX, EDGX and EDGA during such period divided by the total number of shares of such U.S. listed cash equity securities and ETPs that all national securities exchanges and the FINRA Trade Reporting Facilities reported as having been matched during such period;

(ii)
the U.S. equity options market during any period, means the number of U.S. listed equity option contracts that were matched on BZX and EDGX during such period divided by the total number of U.S. listed equity option contracts that all national securities exchanges reported as having been matched during such period; or

(iii)
European trading in the securities traded on Bats Europe for any period, means the total notional value of shares of European listed cash equity securities and ETPs that were matched on Bats Europe, respectively, during such period divided by the total notional value of all trades in the securities and ETPs available for trading on Bats Europe, respectively, during both continuous trading or an auction phase that the major European national securities exchanges and major multilateral trading facilities ("MTFs") reported as having been matched during such period. The total notional value of all such trades does not include the notional value of over-the-counter trades. The total notional value of all trades in the securities and ETPs available for trading on Bats Europe in the denominator of the calculation above will be affected to the extent that additional securities and ETPs are made available for trading on Bats Europe, respectively, during such period or by our inclusion of market data from additional European national securities exchanges or MTFs. Due to the lack of a consolidated European reporting tape, our share of European trading is based on public data provided by third-party sources and represents our best estimate of our market share.

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Summary Selected Unaudited Pro Forma Condensed Combined Financial Information

              The following summary selected unaudited pro forma condensed combined statement of operations data for the nine months ended September 30, 2016 and the year ended December 31, 2015 reflect the Acquisition and related financing transactions as if they had occurred on January 1, 2015. The following summary selected unaudited pro forma condensed combined balance sheet data as of September 30, 2016 reflect the Acquisition and related financing transactions as if they had occurred on September 30, 2016. The unaudited pro forma condensed combined financial data were derived from the unaudited pro forma condensed combined financial information included elsewhere in this prospectus supplement.

              The summary unaudited pro forma condensed combined financial data is not necessarily indicative of operating results that would have been achieved had the Acquisition been completed as of the dates described above and does not intend to project our future financial results after the Acquisition. The summary unaudited pro forma condensed consolidated financial data should be read in conjunction with CBOE Holdings' and Bats' historical financial statements incorporated by reference into this prospectus supplement and the accompanying prospectus and the unaudited pro forma condensed combined financial information and the notes thereto included elsewhere in this prospectus supplement. See "Where You Can Find More Information" and "Unaudited Pro Forma Condensed Combined Financial Statements."


Unaudited Pro Forma Condensed Combined Statement of Operations Data

 
  Nine Months Ended
September 30, 2016
  Year Ended
December 31, 2015
 
 
  (in thousands, except per share data)
 

Total operating revenue

  $ 812,278   $ 1,019,055  

Net income allocated to common stockholders

  $ 190,496   $ 249,645  

Net income per share allocated to common stockholders:

             

Basic

  $ 1.69   $ 2.20  

Diluted

  $ 1.69   $ 2.20  

Weighted average shares used in computing income per share:

             

Basic

    111,826     113,354  

Diluted

    112,339     113,487  


Unaudited Pro Forma Condensed Combined Balance Sheet Data

 
  As of
September 30, 2016
 
 
  (in thousands)
 

Total assets

  $ 5,462,079  

Short-term debt

  $ 642,032  

Long-term debt

  $ 994,825  

Total stockholders' equity

  $ 2,549,111  

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RISK FACTORS

              An investment in the notes involves risk. Prior to making a decision about investing in the notes, and in consultation with your own financial and legal advisors, you should carefully consider the following risk factors regarding the notes and this offering, as well as the risk factors incorporated by reference in this prospectus supplement from our Annual Report on Form 10-K for the year ended December 31, 2015 and our quarterly reports on Form 10-Q for the quarterly periods ended June 30, 2016 and September 30, 2016, in each case under the heading "Risk Factors," and other filings we may make from time to time with the SEC. You should also refer to the other information in this prospectus supplement and the accompanying prospectus, including our financial statements and the related notes incorporated by reference. Additional risks and uncertainties that are not yet identified may also materially harm our business, operating results and financial condition and could result in a complete loss of your investment.

Risks Relating to this Offering and the Notes

Our debt may limit cash flow available to invest in the ongoing needs of our business and could prevent us from fulfilling our obligations under the notes.

              We expect to incur significant debt as a result of the Acquisition, including issuing the notes and borrowing under our new $1.0 billion delayed draw term loan facility (which may be increased by up to $500 million for a total of $1.5 billion) to finance the Acquisition and repay Bats' existing indebtedness. We also have the ability to incur additional debt under our new $150 million senior unsecured revolving credit facility, and the amount of the revolving facility may be increased up to $100 million for a total of $250 million. See "Description of Certain Other Indebtedness" and "Use of Proceeds."

              Our level of debt could have important consequences. For example, it could:

              Additionally, any failure to meet required payments on our debt, or failure to comply with any covenants in the instruments governing our debt, could result in an event of default under the terms of those instruments. In the event of such default, the holders of such debt could elect to declare all the amounts outstanding under such instruments to be due and payable.

The notes are subject to prior claims of any secured creditors and the creditors of our subsidiaries and if a default occurs we may not have sufficient funds to fulfill our obligations under the notes.

              The notes are CBOE Holdings' unsecured general obligations, ranking equally in right of payment with our other existing and future senior unsecured debt, but effectively junior to any senior secured debt and the debt and other liabilities of our subsidiaries. The indenture governing the notes will permit us and our subsidiaries to incur secured debt under specified circumstances. If we incur any secured debt, our assets and the assets of our subsidiaries will be subject to prior claims by our secured creditors. In the event of our bankruptcy, liquidation, reorganization or other winding up, assets that

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secure debt will be available to pay obligations on the notes only after all debt secured by those assets has been repaid in full. Unless we are required to secure the notes, holders of the notes will participate in our remaining assets ratably with all of our unsecured and unsubordinated creditors, including our trade creditors.

              If we incur any additional obligations that rank equally with the notes, including trade payables, the holders of those obligations will be entitled to share ratably with the holders of the notes in any proceeds distributed upon our insolvency, liquidation, reorganization, dissolution or other winding up. This may have the effect of reducing the amount of proceeds paid to you. If there are not sufficient assets remaining to pay all these creditors, all or a portion of the notes then outstanding would remain unpaid.

The indenture will not limit the amount of debt we may incur or restrict our ability to engage in other transactions that may adversely affect holders of our notes.

              The indenture under which the notes will be issued will not limit the amount of debt that we may incur. The indenture will not contain any financial covenants or other provisions that would afford the holders of the notes any substantial protection in the event we participate in a highly leveraged transaction. In addition, the indenture will not limit our ability to pay dividends, make distributions or repurchase shares of our common stock. Any such transaction could adversely affect you.

We depend on cash flow of our subsidiaries to make payments on our securities.

              As a holding company with no significant business operations of its own, CBOE Holdings depends entirely on loans, dividends and distributions, if any, it may receive from its subsidiaries to meet its obligations and pay dividends to its stockholders. Our subsidiaries conduct substantially all of our consolidated operations and own substantially all of our consolidated assets. Consequently, our cash flow and our ability to meet our debt service obligations depend almost entirely upon the cash flow of our subsidiaries and the payment of funds by the subsidiaries to us in the form of loans, dividends or otherwise. Our subsidiaries are not obligated to make funds available to us for payment of the notes or otherwise. In addition, their ability to make any payments will depend on their earnings, the terms of their debt, business and tax considerations and legal restrictions. The notes will effectively rank junior to all liabilities of our subsidiaries. In the event of a bankruptcy, liquidation or dissolution of a subsidiary and following payment of its liabilities, the subsidiary may not have sufficient assets remaining to make payments to us as a stockholder or otherwise.

An active trading market for the notes may not develop.

              There is no existing market for the notes and we do not intend to apply for listing of the notes on any securities exchange or any automated quotation system. Accordingly, there can be no assurance that a trading market for the notes will ever develop or will be maintained. If a trading market does not develop or is not maintained, you may find it difficult or impossible to resell your notes. Further, there can be no assurance as to the liquidity of any market that may develop for such notes, your ability to sell such notes or the price at which you will be able to sell such notes. Future trading prices of the notes will depend on many factors, including prevailing interest rates, our financial condition and results of operations, the then-current ratings assigned to the notes and the markets for similar securities. Any trading market that develops would be affected by many factors independent of and in addition to the foregoing, including:

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              The underwriters have advised us that they currently intend to make a market in the notes, but they are not obligated to do so and may cease market-making at any time without notice.

Ratings of the notes could be lowered or withdrawn in the future and adversely affect the trading price and liquidity of the notes.

              We expect that the notes will be rated by two or more nationally recognized statistical rating organizations. A rating is not a recommendation to purchase, hold or sell debt securities, since a rating does not predict the market price of a particular security or its suitability for a particular investor. Any rating organization that rates the notes may lower our rating or decide not to rate the notes in its sole discretion. The ratings of the notes will be based primarily on the rating organization's assessment of the likelihood of timely payment of interest when due and the payment of principal on the maturity date. Any downgrade or withdrawal of a rating by a rating agency that rates the notes could have an adverse effect on the trading price or liquidity of the notes.

We may choose to redeem the notes prior to maturity, which may adversely affect your return.

              We may redeem some or all of the notes at any time. See "Description of Notes—Optional Redemption." If prevailing interest rates are lower at the time of redemption, you may not be able to reinvest the redemption proceeds in a comparable security at an interest rate as high as the interest rate of the notes being redeemed.

An increase in market interest rates could result in a decrease in the value of the notes.

              In general, as market interest rates rise, notes bearing interest at a fixed rate decline in value because the premium, if any, over market interest rates will decline. Consequently, if you purchase the notes and market interest rates increase, the market value of your notes may decline. We cannot predict the future level of market interest rates.

The change of control triggering event provision in the notes provides only limited protection against significant events that could negatively impact the value of your notes.

              As described under "Description of Notes—Change of Control," upon the occurrence of a change of control triggering event with respect to the notes, we will be required to offer to repurchase the notes at 101% of their principal amount plus accrued and unpaid interest, if any, to, but excluding, the repurchase date, unless the notes have already been called for redemption. However, the definition of the term "change of control triggering event" is limited and does not cover a variety of transactions (such as certain highly leveraged transactions, reorganizations, restructurings, mergers or similar transactions) that could negatively impact the value of your notes. For a change of control triggering event to occur, there must be both a change of control and a ratings downgrade to below investment grade (as defined in the indenture) by each of the two rating agencies. As such, if we enter into a significant corporate transaction that negatively impacts the value of your notes, but which does not constitute a change of control triggering event, you would not have any rights to require us to repurchase the notes prior to their maturity (other than pursuant to the special mandatory redemption provision, if applicable) or to otherwise seek any remedies.

We may not be able to repurchase all of the notes upon a change of control triggering event, which would result in a default under the notes.

              We will be required to offer to repurchase the notes upon the occurrence of a change of control triggering event as provided in the indenture governing the notes. However, we may not have sufficient funds to repurchase the notes in cash at such time. In addition, our ability to repurchase the

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notes for cash may be limited by law or the terms of other agreements relating to our debt outstanding at the time. The failure to make such repurchase would result in a default under the notes.

We may be unable to redeem any or all of the notes in the event of a special mandatory redemption.

              The notes will be subject to a special mandatory redemption in the event that the Acquisition is not consummated on or prior to October 23, 2017 or, if prior to October 23, 2017, the Merger Agreement is terminated, subject to certain conditions. In such an event, the notes will be redeemed at a price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the special mandatory redemption date. See "Description of Notes—Special Mandatory Redemption." We are not obligated to place the proceeds of the offering of the notes in escrow prior to the completion of the Acquisition or to provide a security interest in those proceeds, and there are no other restrictions on our use of these proceeds during such time. Accordingly, we will need to fund any special mandatory redemption using proceeds that we have voluntarily retained or from other sources of liquidity. In the event of a special mandatory redemption, we may not have sufficient funds to purchase any or all of the notes.

In the event of a special mandatory redemption, holders of the notes may not obtain their expected return on such notes.

              If we redeem the notes pursuant to the special mandatory redemption provisions, you may not obtain your expected return on the notes and may not be able to reinvest the proceeds from such special mandatory redemption in an investment that results in a comparable return. In addition, as a result of the special mandatory redemption provisions of the notes, the trading prices of the notes may not reflect the financial results of our business or macroeconomic factors. You will have no rights under the special mandatory redemption provisions if the Acquisition closes, nor will you have any right to require us to repurchase your notes if, between the closing of this offering and the completion of the Acquisition, we experience any changes (including any material adverse changes) in our business or financial condition (other than a change of control triggering event with respect to us), or if the terms of the Merger Agreement change, including in material respects.

Risks Relating to the Acquisition and the Combined Company

The combined company may not realize all of the anticipated benefits of the transactions contemplated by the Merger Agreement or such benefits may take longer to realize than expected.

              The success of the Acquisition will depend, in part, on the combined company's ability to realize the anticipated benefits from combining the businesses of CBOE Holdings and Bats. The combined company's ability to realize the anticipated benefits of the Acquisition will depend, to a large extent, on the ability of CBOE Holdings to integrate the businesses of Bats with CBOE Holdings. The combination of two independent companies is a complex, costly and time-consuming process. As a result, the combined company will be required to devote significant management attention and resources to integrating the business practices and operations of CBOE Holdings and Bats. The integration process may disrupt the business of either or both of the companies and, if implemented ineffectively, could preclude realization of the full benefits expected by CBOE Holdings and Bats. The failure of the combined company to meet the challenges involved in integrating successfully the operations of CBOE Holdings and Bats or otherwise to realize the anticipated benefits of the proposed transactions could cause an interruption of, or a loss of momentum in, the activities of the combined company and could seriously harm its results of operations. In addition, the overall integration of the two companies may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of client relationships and diversion of management's attention, and may cause the

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combined company's stock price to decline. The difficulties of combining the operations of the companies include, among others:

              Many of these factors will be outside of the combined company's control and any one of them could result in increased costs, decreases in the amount of expected revenues and diversion of management's time and energy, which could materially impact the combined company's business, financial condition and results of operations. In addition, even if the operations of CBOE Holdings and Bats are integrated successfully, the combined company may not realize the full benefits of the proposed transactions, including the synergies, cost savings or growth opportunities that the combined company expects. These benefits may not be achieved within the anticipated time frame, or at all. As a result, we cannot assure you that the combination of Bats with CBOE Holdings will result in the realization of the full benefits anticipated from the transactions contemplated by the Merger Agreement.

A failure to integrate successfully or a material disruption in information technology systems could adversely affect the combined company's business and results of operations.

              The combined company will rely extensively on its information technology systems. The failure of information technology systems to operate effectively, difficulty in integrating the information technology systems of CBOE Holdings and Bats, inconsistencies in standards, controls, procedures and policies and problems with transitioning to upgraded or replacement systems could adversely impact the business of the combined company. In addition, a number of CBOE Holdings' trading permit holders are not connected to Bats' information technology platforms and must complete the process of connecting to these platforms as part of the integration.

              The process of integrating information technology systems may take longer, cost more and provide fewer synergies than initially anticipated. There may also be new regulations adopted during the transition period that require systems changes, which could divert attention away from integration

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process and cause delays. To the extent this occurs, the benefits of the proposed transaction may be reduced or delayed or may never come to fruition. Although Bats has experience with transitioning other businesses to its information technology platform, there are certain portions of CBOE Holdings' business, such as open outcry trading and complex order trading, that have not yet been addressed by Bats' information technology platform.

              We currently expect to complete the integration of CBOE Holdings' information technology systems with those of Bats in phases over a four-year period following the Acquisition. However, we may not be able to successfully achieve the transition on the timetable currently contemplated, and the transition may not be successful or could encounter various difficulties and unexpected issues. Any delays or issues that we encounter in the transition could have a material adverse effect on the businesses of the combined company and could negatively affect the combined company's reputation, which in turn could have a material adverse effect on the combined company's overall business, results of operations and financial condition, as well as impair customer confidence in the combined company's product offerings and overall services.

CBOE Holdings expects to incur substantial indebtedness to finance the Acquisition, which may decrease CBOE Holdings' business flexibility and adversely affect CBOE Holdings' financial results.

              The combined company expects to incur indebtedness of up to approximately $1.65 billion to finance a portion of the cash component of the Acquisition consideration, to repay existing indebtedness of Bats and its subsidiaries and to pay related fees and expenses. Prior to entering into the Merger Agreement, CBOE Holdings did not have any indebtedness and was not subject to any financial covenants. The financial and other covenants to which CBOE Holdings has agreed or may agree to in connection with the incurrence of new indebtedness, and the combined company's increased indebtedness, may have the effect, among other things, of reducing the combined company's flexibility to respond to changing business and economic conditions, thereby placing the combined company at a competitive disadvantage compared to competitors that have less indebtedness and making the combined company more vulnerable to general adverse economic and industry conditions. The combined company's increased indebtedness will also increase borrowing costs, and the covenants pertaining thereto may also limit the combined company's ability to repurchase shares of CBOE Holdings common stock, increase dividends or obtain additional financing to fund working capital, capital expenditures, acquisitions or general corporate requirements. The combined company will also be required to dedicate a larger portion of its cash flow from operations to payments on its indebtedness, thereby reducing the availability of its cash flow for other purposes, including working capital, capital expenditures and general corporate purposes. In addition, the terms and conditions of such debt may not be favorable to the combined company and, as such, could further increase the costs of the Acquisition, as well as the overall burden of such debt upon the combined company and the combined company's business flexibility. Further, if any portion of the combined company's borrowings is at variable rates of interest, the combined company will be exposed to the risk of increased interest rates unless the combined company enters into offsetting hedging transactions.

              The combined company's ability to make payments on and to refinance its debt obligations and to fund planned capital expenditures will depend on its ability to generate cash from the combined company's operations. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the combined company's control.

              The combined company may not be able to refinance any of its indebtedness on commercially reasonable terms, or at all. If the combined company cannot service its indebtedness, the combined company may have to take actions such as selling assets, seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances, any of which could impede the implementation of the combined company's business strategy or prevent the combined company from entering into transactions that would otherwise benefit its business. Additionally, the

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combined company may not be able to effect such actions, if necessary, on commercially reasonable terms, or at all.

              Any of the foregoing consequences could adversely affect the combined company's financial results.

The unaudited pro forma condensed combined financial statements included in this prospectus supplement are not necessarily an indication of the combined company's financial condition or results of operations following the proposed transactions.

              The assumptions used in preparing the unaudited pro forma condensed combined financial information contained in this prospectus supplement may not prove to be accurate, and other factors may affect the combined company's financial condition or results of operations following the proposed transactions. Any decline or potential decline in the combined company's financial condition or results of operations may cause significant variations in the stock price of the combined company. See "Unaudited Pro Forma Condensed Combined Financial Statements."

Risks Relating to Our Business Following the Consummation of the Acquisition

If the combined company is unable to manage its growth, its business and financial results could suffer.

              The combined company's future financial results will depend in part on its ability to manage its core businesses, including any growth that the combined company may be able to achieve. Over the past several years, each of CBOE Holdings and Bats has engaged in the identification of, and competition for, growth and expansion opportunities. In order to achieve those initiatives, the combined company will need to, among other things, recruit, train, retain and effectively manage employees and expand its operations and financial control systems. If the combined company is unable to manage its businesses effectively and profitably, its business and financial results could suffer.

To be successful, the combined company must retain and motivate key employees, including those experienced with post-Acquisition integration, and failure to do so could seriously harm the combined company.

              The success of the combined company, like each of CBOE Holdings and Bats, largely depends on the skills, experience and continued efforts of management and other key personnel. As a result, to be successful, the combined company must retain and motivate executives and other key employees. In particular, the combined company expects to benefit from the integration experience of certain Bats personnel. Certain key executives of Bats have executed offer letters with CBOE Holdings to continue their employment following the Acquisition. However, these executives will continue to be at-will employees, and the offer letters provide no assurance that these executives will remain with the combined company. Additionally, certain of CBOE Holdings' information technology employees will be important to retain during the transition period to effectively manage CBOE Holdings' information technology platforms and to assist Bats in the process of integrating its information technology platform. If these personnel were to leave, the combined company may experience increased difficulty in the post-Acquisition integration process and may not be able to adequately replace such personnel, which could have a material adverse effect on the combined company's overall business, results of operations and financial condition.

              Employees of CBOE Holdings and Bats may experience uncertainty about their future roles with the combined company until integration strategies for the combined company are announced or executed. These circumstances may adversely affect the combined company's ability to retain key personnel. The combined company also must continue to motivate employees and maintain their focus on the strategies and goals of the combined company. Doing so may be difficult due to the uncertainties and challenges associated with post-Acquisition integration. If the combined company is unable to retain executives and other key employees, the roles and responsibilities of such executive

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officers and employees will need to be filled either by existing or new officers and employees, which may require the combined company to devote time and resources to identifying, hiring and integrating replacements for the departed executives and employees that could otherwise be used to integrate the businesses of CBOE Holdings and Bats or otherwise pursue business opportunities. There can be no assurance that the combined company will be able to retain and motivate its employees in the same manner as CBOE Holdings and Bats have historically done.

The combined company may need to hire additional personnel in order to assist with the transition of CBOE Holdings' businesses to the Bats information technology platform. It may be difficult for the combined company to retain and recruit qualified employees in sufficient numbers, and if the combined company is unable to satisfy its needs for qualified and capable employees, its business and operating results could be adversely affected.

              There is substantial competition for qualified and capable personnel in the technology space, which may make it difficult for the combined company to retain and recruit qualified employees in sufficient numbers. Increased difficulty in retaining or recruiting sufficient and qualified personnel by the combined company may lead to increased employment compensation costs, which could adversely affect the combined company's results of operations. In addition, the increased number of employees may impose a significant administrative burden on the combined company. If the combined company is unable to retain and recruit highly qualified employees by offering competitive compensation, stable work environment and leadership opportunities now and in the future, the combined company's business and operating results could be negatively impacted.

The Acquisition will result in changes to the board of directors and management of the combined company that may affect the strategy of the combined company as compared to that of CBOE Holdings and Bats.

              If the parties complete the Acquisition, the composition of the board of directors of the combined company and management team will change from the current boards and management teams of CBOE Holdings and Bats. The board of directors of the combined company will consist of 14 members, including three individuals designated by Bats who are serving as Bats directors immediately prior to the effective time of the Acquisition. The combined company will also have executive officers from both CBOE Holdings and Bats. This new composition of the board of directors and the management team of the combined company may affect the business strategy and operating decisions of the combined company upon the completion of the Acquisition.

Bats generates a significant percentage of its total revenues from, and is provided with significant liquidity in its markets and other services by, entities who are affiliates of its significant stockholders, and there is no assurance that such entities will continue to generate such revenue or provide such liquidity and other services after the completion of the Acquisition.

              Bats earns a significant percentage of its revenue from customers who are affiliates of its significant stockholders. In addition, Bats relies on certain entities who are affiliates of significant Bats stockholders to route orders that are not routed directly by Bats and to clear certain trades routed to other markets. The significant stockholders of Bats may not receive CBOE Holdings stock in the Acquisition or, even if they do, their proportionate stake in the combined company will be significantly less than their stake in Bats prior to the Acquisition, so there may be less incentive for the affiliates of Bats' significant stockholders to maintain their current business relationships with the combined company following the Acquisition at current levels or at all. If the affiliates of Bats' significant stockholders do not remain customers following the Acquisition at current levels or at all or if any of the affiliates of Bats' significant stockholders do not continue to route and clear trades as they did prior to the Acquisition, the combined company may experience decreased revenues and business

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interruptions, which could have a material adverse effect on the business, results of operations and financial condition of the combined company.

The combined company will record goodwill and intangible assets that could become impaired and adversely affect its results of operations and financial condition.

              Accounting standards in the United States require that one party to the Acquisition be identified as the acquirer. In accordance with these standards, the Acquisition will be accounted for as an acquisition of Bats by CBOE Holdings and will follow the acquisition method of accounting for business combinations. The assets and liabilities of Bats will be consolidated with those of CBOE Holdings. The excess of the purchase price over the fair values of Bats' assets and liabilities, if any, will be recorded as goodwill. The unaudited pro forma condensed combined balance sheet as of September 30, 2016 reflects goodwill of $1.3 billion and intangible assets of $3.2 billion. These amounts include $1.3 billion of goodwill and $3.0 billion of intangible assets resulting from the Acquisition, which are based on CBOE Holdings management's preliminary fair value estimates and are subject to change, including due to fluctuations in the market value of CBOE Holdings common stock as discussed in note 3 to the "Unaudited Pro Forma Condensed Combined Financial Statements" herein.

              The combined company will be required to assess goodwill and intangible assets for impairment at least annually. In the future the combined company may take charges against earnings resulting from impairment. Any determination requiring the write off of a significant portion of the combined company's goodwill or other intangible assets could adversely affect the combined company's results of operations and financial condition.

CBOE Holdings and Bats will incur significant transaction and integration costs in connection with the Acquisition.

              CBOE Holdings and Bats expect to incur a number of costs associated with completing the Acquisition and integrating the operations of the two companies. The substantial majority of these costs will be non-recurring expenses resulting from the Acquisition and will consist of transaction costs related to the Acquisition, facilities and systems consolidation costs and employment-related costs. Additional unanticipated costs may be incurred in the integration of the businesses of CBOE Holdings and Bats. Although CBOE Holdings and Bats expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, will offset incremental transaction and Acquisition related costs over time, this net benefit may not be achieved in the near term, or at all.

The Acquisition may not be accretive and may cause dilution to the combined company's earnings per share, which may negatively affect the market price of the combined company's common stock.

              CBOE Holdings currently anticipates that the Acquisition will be accretive to adjusted earnings per share in the first year following the completion of the Acquisition. This expectation is based on preliminary estimates, which may materially change. The combined company could also encounter additional transaction and integration-related costs or other factors such as the failure to realize all of the benefits anticipated in the Acquisition. All of these factors could cause dilution to the combined company's earnings per share or decrease or delay the expected accretive effect of the merger and cause a decrease in the price of the combined company's common stock.

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USE OF PROCEEDS

              We expect to receive net proceeds, after deducting underwriting discounts and estimated offering expenses, of approximately $643 million from this offering. We intend to use a portion of the net proceeds from this offering to fund, in part, the Acquisition, including the payment of related fees and expenses and the repayment of Bats' existing indebtedness, and the remainder for general corporate purposes. If the Acquisition is not consummated for any reason, we will be required to redeem the notes in a special mandatory redemption. See "Description of Notes—Special Mandatory Redemption." Pending final use, we may invest the net proceeds from this offering in short-term marketable securities. The closing of this offering is expected to occur prior to the consummation of the Acquisition.

              We intend to finance the Acquisition, including the payment of related fees and expenses, as well as the repayment of Bats' existing indebtedness, with new long-term debt and the net proceeds from this offering. In connection with entering into the Merger Agreement, we entered into a commitment letter relating to a $1.65 billion senior unsecured 364-day bridge loan facility. In lieu of entering into the bridge facility, we intend to issue the notes in this offering and borrow under our new $1.0 billion delayed draw term loan facility. See "Description of Certain Other Indebtedness."

              The following table sets forth the anticipated sources and uses of funds in connection with this offering and the Acquisition (in millions).

Sources of Funds
   
 
Uses of Funds
   
 

New term loan

  $ 1,000.0  

Bats cash purchase price

  $ 948.1  

2027 notes offered hereby

    650.0  

Repayment of Bats debt(1)

    580.0  

       

General corporate purposes and other transaction expenses

    121.9  

Total

  $ 1,650.0  

Total

  $ 1,650.0  

(1)
Represents amounts outstanding as of December 31, 2016 under Bats' $650 million term loan credit facility maturing in June 2023. As of December 31, 2016, Bats' term loan credit facility bore interest at the rate of 4.0%. Affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities Inc., underwriters in this offering, are lenders under Bats' term loan credit facility. Accordingly, such affiliates will receive their proportionate share of the indebtedness that is repaid with the net proceeds of this offering. See "Underwriting—Other Relationships."

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CAPITALIZATION

              The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2016 (1) on an actual basis and (2) on an as adjusted basis to give effect to the Acquisition and the related financing transactions, including this offering, as described under "Use of Proceeds."

              You should read this table in conjunction with our consolidated financial statements, the related notes and other financial information contained in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016, which is incorporated by reference into this prospectus supplement and the accompanying prospectus.

 
  As of September 30, 2016  
 
  Actual   As adjusted(1)  
 
  (unaudited, dollars in
millions)

 

Cash and cash equivalents

  $ 72.8   $ 221.9  

Long-term debt

             

New term loan facility

  $   $ 1,000.0  

2027 notes offered hereby

        650.0  

Total long-term debt

        1,650.0  

Total CBOE Holdings stockholders' equity

    289.6     2,549.1  

Total capitalization

  $ 289.6   $ 4,199.1  

(1)
Assumes (a) the consummation of the Acquisition, (b) the repayment and extinguishment of Bats' existing indebtedness, (c) the entry into, and borrowing in full under, the new term loan facility as described below under "Description of Certain Other Indebtedness—New Term Loan," and (d) the issuance of the notes in this offering (in lieu of borrowing under the bridge loan facility). Does not reflect any borrowings under the new revolving credit facility as described below under "Description of Certain Other Indebtedness—New Revolving Facility," as we do not expect to draw on such facility to finance the Acquisition.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

              The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2016 and for the twelve months ended December 31, 2015 give effect to the Acquisition and related financing transactions as if they had occurred on January 1, 2015. The unaudited pro forma condensed combined balance sheet as of September 30, 2016 gives effect to the Acquisition and related financing transactions as if they had occurred on September 30, 2016 (together with the unaudited pro forma condensed combined statement of operations, the "pro forma financial statements"). Assumptions and estimates underlying the unaudited adjustments to the pro forma financial statements are described in the accompanying notes.

              CBOE Holdings has entered into a $1.0 billion senior unsecured delayed draw term facility (subject to increase of up to $1.5 billion in the aggregate) to replace a portion of the bridge facility and also expects to issue the notes offered hereby prior to the completion of the Acquisition in lieu of drawing the remainder amount on the bridge facility. Accordingly, CBOE Holdings does not expect to fund the cash portion of the Acquisition consideration, the repayment of certain indebtedness of Bats and its subsidiaries or related fees and expenses with the bridge facility. For purposes of the pro forma financial statements, the related financing transactions are presented as if $1.0 billion of the funding were provided pursuant to the senior unsecured term facility and the remaining $650 million were provided pursuant to the bridge facility.

              As explained in more detail in the accompanying notes to the pro forma financial statements, the acquisition accounting is dependent upon certain valuations and other analyses that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. The historical consolidated financial information has been adjusted to give effect to pro forma events that are (i) directly attributable to the Acquisition and related financing transactions and the acquisition of Bats by CBOE Holdings, (ii) factually supportable and (iii) with respect to the statement of operations, expected to have a continuing impact on the combined results. The adjustments to the pro forma financial statements are preliminary and have been made solely for the purpose of presenting the pro forma financial statements, which are necessary to comply with the applicable disclosure and reporting requirements of the SEC. The pro forma financial statements are not intended to represent what CBOE Holdings' actual consolidated results of operations or consolidated financial position would have been had the Acquisition and the related financing transactions occurred on the dates assumed, nor are they necessarily indicative of CBOE Holdings' future consolidated results of operations or consolidated financial position. The actual results reported in periods following the closing of the Acquisition, the related financing transactions and the Acquisition may differ significantly from the pro forma financial statements for a number of reasons including, but not limited to: differences in the ordinary conduct of the business following the Acquisition, differences between the assumptions used to prepare the pro forma financial statements and actual amounts, cost savings from operating efficiencies, potential synergies and the impact of the incremental costs incurred in integrating the companies.

              The pro forma financial statements were prepared using the acquisition method of accounting with CBOE Holdings considered the acquirer of Bats. Under the acquisition method of accounting, the purchase price is allocated to the underlying Bats tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill.

              As of the date of this prospectus supplement, CBOE Holdings has not completed the detailed valuation studies necessary to arrive at the required estimates of the fair value of the Bats assets to be acquired and the liabilities to be assumed and the related allocations of purchase price, nor has CBOE Holdings identified all adjustments necessary to conform Bats' accounting policies to CBOE Holdings' accounting policies. A final determination of the fair value of Bats' assets and liabilities, including intangible assets with both indefinite or finite lives, will be based on the actual net tangible and

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intangible assets and liabilities of Bats that exist as of the closing date of the Acquisition and, therefore, cannot be made prior to the completion of the transaction. In addition, the value of the consideration to be paid by CBOE Holdings upon the consummation of the Acquisition will be determined based on the closing price of CBOE Holdings common stock on the closing date of the Acquisition. As a result of the foregoing, the adjustments in the pro forma financial statements are preliminary and are subject to change as additional information becomes available and as additional analyses are performed. The preliminary pro forma adjustments have been made solely for the purpose of providing the unaudited pro forma condensed combined financial statements presented below. CBOE Holdings' management estimated the fair value of Bats' assets and liabilities based on discussions with Bats' management, preliminary valuation studies, due diligence and information presented in Bats' public filings with the SEC. Until the Acquisition is completed, both companies are limited in their ability to share certain information. Upon completion of the Acquisition, final valuations will be performed. Any increases or decreases in the fair value of relevant balance sheet amounts upon completion of the final valuations will result in adjustments to the pro forma balance sheet and/or statement of operations.

              The pro forma adjustments and related assumptions are described in the accompanying notes to the pro forma financial statements. CBOE Holdings believes that the assumptions used to derive the pro forma adjustments are reasonable given the information available. However, as the valuations of acquired assets and liabilities assumed are not expected to be finalized until after the Acquisition is completed, and information may become available within the measurement period which indicates a potential change to these valuations, the purchase price allocation as presented in the pro forma financial statements may be subject to adjustment.

              Further, the pro forma financial statements do not reflect the full amount of the permanent financing that CBOE Holdings is seeking to obtain, any cost savings from operating efficiencies, any other potential synergies or the costs necessary to achieve any such savings or synergies. The pro forma financial statements are based on the historical financial statements of CBOE Holdings and Bats, as adjusted for the pro forma effect of the Acquisition and the related financing transactions using a combination of the senior unsecured term facility and the bridge facility. The pro forma financial statements should be read in conjunction with the historical financial statements and the accompanying notes of CBOE Holdings included in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 and its Annual Report on Form 10-K for the fiscal year ended December 31, 2015, each of which is incorporated by reference into this prospectus supplement. See "Where You Can Find More Information." The pro forma financial statements should also be read in conjunction with the historical financial statements and the accompanying notes of Bats for the same periods, which are incorporated by reference into this prospectus supplement.

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CBOE Holdings, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
September 30, 2016
(in thousands)

 
  CBOE
Holdings
(actual)
  Bats
(actual)
  Merger
Pro Forma
Adjustments
  Note
Reference
(Note 4)
  Total
Pro Forma
Combined
 

ASSETS

                             

Cash and cash equivalents

  $ 72,759   $ 69,097   $ 80,086   A   $ 221,942  

Restricted cash

          1,800               1,800  

Financial investments

          500               500  

Accounts receivable, net

    61,112     135,638               196,750  

Marketing fee receivable

    7,172                   7,172  

Income taxes receivable

    52,190         10,024   B     62,214  

Other prepaid expenses

    8,495     6,630               15,125  

Deferred financing costs

    4,718           (4,718 ) C      

Other current assets

    137     2,109               2,246  

Total current assets

    206,583     215,774     85,392         507,749  

Investments

    73,469     11,123     500   D     85,092  

Land

    4,914                   4,914  

Property and equipment, net

    59,911     25,146               85,057  

Goodwill

    26,468     727,221     (727,221 ) E     1,484,013  

                1,457,545   F        

Other Assets:

   
 
   
 
   
 
 

 

   
 
 

Intangibles

    9,094     218,224     2,986,776   E, G     3,214,094  

Deferred income taxes

          11,231               11,231  

Software work in progress

    24,953                   24,953  

Data processing and other assets

    35,950     9,026               44,976  

Total other

    69,997     238,481     2,986,776         3,295,254  

Total assets

  $ 441,342   $ 1,217,745   $ 3,802,992       $ 5,462,079  

LIABILITIES AND STOCKHOLDERS' EQUITY

                             

Accounts payable

  $ 66,421   $ 83,319   $ 36,803   B   $ 186,543  

Section 31 fees payable

          25,141               25,141  

Marketing fee payable

    7,646                   7,646  

Deferred revenue and other

    7,010                   7,010  

Post-retirement benefit obligations—current

    27                   27  

Current portion of debt

          4,123     637,909   A, C     642,032  

Contingent consideration

        6,552               6,552  

Income tax payable

    18                   18  

Total current liabilities

    81,122     119,135     674,712         874,969  

Post-retirement benefit obligations—long-term

    1,922                   1,922  

Long-term debt

          595,151     399,674   H     994,825  

Contingent

        54,448               54,448  

Income tax liability

    47,667     11,365               59,032  

Other long-term

    2,713     2,723               5,436  

Deferred income taxes

    5,753     161     903,822   I     909,736  

Total long-term liabilities

    58,055     663,848     1,303,496         2,025,399  

Commitments

                     

Total liabilities

    139,177     782,983     1,978,208         2,900,368  

Redeemable noncontrolling

    12,600                   12,600  

Total stockholders' equity

    289,565     434,762     1,824,784   J     2,549,111  

Total liabilities and stockholders' equity

  $ 441,342   $ 1,217,745   $ 3,802,992       $ 5,462,079  

See the accompanying notes to the unaudited pro forma financial statements

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CBOE Holdings, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the nine months ended September 30, 2016
(in thousands, except per share data)

 
  CBOE
Holdings
(actual)
  Bats
(actual)
  Merger
Pro Forma
Adjustments
  Note
Reference
(Note 5)
  Re-classifications
(Note 6)
  Total
Pro Forma
Combined
 

Operating Revenues:

                                   

Transaction fees

  $ 347,863   $ 1,011,155   $       $   $ 1,359,018  

Access fees

    39,447                           39,447  

Exchange services and other fees

    34,263     74,236                     108,499  

Market data fees

    24,363     110,155                     134,518  

Regulatory fees

    27,436     222,790                     250,226  

Other revenue

    8,494                           8,494  

Total revenue

    481,866     1,418,336                 1,900,202  

Cost of revenue:

                                   

Liquidity payments

          832,446                     832,446  

Section 31 fees

          222,790                     222,790  

Routing and clearing

          32,808                   32,808  

Other

          (120 )                   (120 )

Total cost of revenue

        1,087,924                 1,087,924  

Revenues less cost of revenues

    481,866     330,412                 812,278  

Operating Expenses:

                                   

Compensation and benefits

    83,980     68,686                     152,666  

Depreciation and amortization

    34,311     31,309     32,028   K           97,648  

Technology support services

    16,944     13,479               3,908     34,331  

Professional fees and outside services

    49,758     10,439     (12,136 ) L     12,930     60,991  

Royalty fees

    57,849                         57,849  

Order routing

    557                         557  

Travel and promotional

    7,616                   4,797     12,413  

Facilities

    4,268     2,086               1,111     7,465  

Regulatory costs

        8,644             (8,644 )    

Change in fair value of contingent consideration liability to related party

        2,152             (2,152 )    

General and administrative

        17,813             (17,813 )    

Other expenses

    3,485                   5,863     9,348  

Total operating expenses

    258,768     154,608     19,892             433,268  

Operating Income

    223,098     175,804     (19,892 )             379,010  

Non-operating income (expense):

                                   

Interest and other borrowing costs

    (232 )   (29,798 )   (15,066 ) M           (45,096 )

Loss on extinguishment of debt

        (17,565 )                   (17,565 )

Net income from investments

    830     1,211                     2,041  

Investment and other income

    7,921     199                     8,120  

Total non-operating income (expense)

    8,519     (45,953 )   (15,066 )             (52,500 )

Income before income taxes

    231,617     129,851     (34,958 )             326,510  

Income tax provision

    91,059     53,343     (8,972 ) N           135,430  

Net income

    140,558     76,508     (25,986 )             191,080  

Net loss attributable to noncontrolling interests

    792                         792  

Net income excluding noncontrolling interests

    141,350     76,508     (25,986 )             191,872  

Change in redemption value of non-controlling interest

    (792 )                         (792 )

Net income allocated to participating securities

    (584 )                         (584 )

Net income allocated to common stockholders

  $ 139,974   $ 76,508   $ (25,986 )     $   $ 190,496  

Earnings per share

                                   

Basic

  $ 1.72   $ 0.81                   $ 1.69  

Diluted

  $ 1.72   $ 0.79                   $ 1.69  

Weighted average number of shares

                                   

Basic

    81,481     94,800     (64,455 ) O           111,826  

Diluted

    81,481     96,400     (65,542 ) O           112,339  

See the accompanying notes to the unaudited pro forma financial statements

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CBOE Holdings, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended December 31, 2015
(in thousands, except per share data)

 
  CBOE
Holdings
(actual)
  Bats
(actual)
  Merger
Pro Forma
Adjustments
  Note
Reference
(Note 5)
  Re-classifications
(Note 6)
  Total
Pro Forma
Combined
 

Operating revenues:

                                   

Transaction fees

  $ 456,016   $ 1,290,234   $       $   $ 1,746,250  

Access fees

    53,295                         53,295  

Exchange services and other fees

    42,209     81,819                     124,028  

Market data fees

    30,034     130,880                     160,914  

Regulatory fees

    33,489     275,747                     309,236  

Other revenue

    19,502                           19,502  

Total revenue

    634,545     1,778,680                 2,413,225  

Cost of revenue:

                                   

Liquidity payments

          1,070,686                     1,070,686  

Section 31 fees

          275,747                     275,747  

Routing and clearing

          47,737                     47,737  

Total cost of revenue

        1,394,170                 1,394,170  

Revenues less cost of revenues

    634,545     384,510                 1,019,055  

Operating expenses:

                                   

Compensation and benefits

    105,925     79,826                     185,751  

Depreciation and amortization

    46,274     40,751     43,112   K           130,137  

Technology support services

    20,662     27,187               11,792     59,641  

Professional fees and outside services

    50,060     11,122               14,462     75,644  

Royalty fees

    70,574                         70,574  

Order routing

    2,293                         2,293  

Travel and promotional

    8,982                   5,328     14,310  

Facilities

    4,998     3,030               1,773     9,801  

Regulatory costs

        11,138             (11,138 )    

Change in fair value of contingent consideration liability to related party

        2,800             (2,800 )    

General and administrative

        26,220             (26,220 )    

Other expenses

    4,849                   6,803     11,652  

Total operating expenses

    314,617     202,074     43,112             559,803  

Operating income

    319,928     182,436     (43,112 )             459,252  

Non-operating income (expense):

                                   

Interest and other borrowing costs

    (43 )   (46,593 )   (14,899 ) M           (61,535 )

Net income from investments

    447     1,186                     1,633  

Investment and other income

    3,692     1,703                     5,395  

    4,096     (43,704 )   (14,899 )             (54,507 )

Income before income taxes

    324,024     138,732     (58,011 )             404,745  

Income tax provision

    119,001     56,506     (21,305 ) N           154,202  

Net income

    205,023     82,226     (36,706 )             250,543  

Net loss attributable to noncontrolling interests

                             

Net income excluding noncontrolling interests

    205,023     82,226     (36,706 )             250,543  

Net income allocated to participating securities

    (898 )                         (898 )

Net income allocated to common stockholders

  $ 204,125   $ 82,226   $ (36,706 )     $   $ 249,645  

Earnings per share

                                   

Basic

  $ 2.46   $ 0.87                   $ 2.20  

Diluted

  $ 2.46   $ 0.87                   $ 2.20  

Weighted average number of shares

                                   

Basic

    83,081     94,575     (64,302 ) O           113,354  

Diluted

    83,081     94,986     (64,580 ) O           113,487  

See the accompanying notes to the unaudited pro forma financial statements

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1.           Description of Transaction

              On September 25, 2016, CBOE Holdings announced that it had entered into the Merger Agreement, providing, among other things, that, upon the terms and subject to the conditions set forth in the Merger Agreement, a wholly owned subsidiary of CBOE Holdings will merge with and into Bats, with Bats surviving as a wholly owned subsidiary of CBOE Holdings (the "merger"). The Merger Agreement also provides that, immediately following the effective time of the merger, Bats, as the surviving corporation in the merger, will merge with and into CBOE V, LLC ("Merger LLC"), with Merger LLC surviving the subsequent merger.

              Each share of voting or non-voting Bats common stock outstanding immediately prior to the effective time of the merger (other than shares held by CBOE Holdings, Bats or any of their respective subsidiaries, shares held by any holder of Bats common stock who is entitled to demand and properly demands appraisal of such shares under Delaware law and unvested restricted shares of Bats common stock granted under any Bats equity incentive plan) will convert into, at the election of the holder of such share, subject to proration and adjustment, either (i) mixed consideration, which consists of $10.00 in cash and 0.3201 of a share of CBOE Holdings common stock, (ii) cash consideration, which consists of an amount of cash equal to the sum, rounded to two decimal places, of (a) $10.00 plus (b) the product of 0.3201 of a share of CBOE Holdings common stock multiplied by the volume-weighted average price, rounded to four decimal places, of shares of CBOE Holdings common stock on the NASDAQ Stock Market LLC ("NASDAQ") for the ten consecutive trading day period ending on the second full trading day prior to the effective time of the merger (the "closing CBOE Holdings VWAP") or (iii) stock consideration, which consists of a number of shares of CBOE Holdings common stock equal to the sum of (a) 0.3201 of a share of CBOE Holdings common stock and (b) the quotient obtained by dividing $10.00 by the closing CBOE Holdings VWAP. Holders of Bats voting and non-voting common stock who do not make an election will receive the mixed consideration.

              The completion of the Acquisition is subject to certain conditions, including, among others, (i) CBOE Holdings stockholders approving the proposal to approve the issuance of shares of CBOE Holdings common stock pursuant to the Merger Agreement and Bats stockholders approving the proposal to adopt the Merger Agreement, (ii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of certain other governmental approvals and (iii) other customary closing conditions. The Acquisition is expected to close in the first half of 2017.

              Concurrently, and in connection with entering into the Merger Agreement, CBOE Holdings entered into a commitment letter, pursuant to which, Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any of its designated affiliates) (Bank of America, N.A., and other such financial institutions that accede as lender to the debt commitment letter in accordance with its terms, the "commitment parties"), subject to the satisfaction and waiver of certain conditions, have committed to provide debt financing for the purposes of funding (i) the cash portion of the merger consideration, (ii) the repayment of certain existing indebtedness of Bats and its subsidiaries and (iii) related fees and expenses, which debt financing consists of a senior unsecured 364-day bridge loan facility in an aggregate principal amount of up to $1.65 billion (the "bridge facility") due and payable 364 days after the closing date to the extent CBOE Holdings fails to generate gross cash proceeds in an aggregate principal amount of up to $1.65 billion from permanent financing, including pursuant to the new senior unsecured term loan facility and the issuance of the notes offered hereby on or prior to the consummation of the transactions contemplated by the Merger Agreement.

              The commitment parties' obligations to provide such financing became effective September 25, 2016 and will end on the earliest of (i) the termination of the Merger Agreement pursuant to its terms, (ii) July 25, 2017 (or if the outside date is extended pursuant to the terms of the Merger Agreement,

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October 23, 2017) or (iii) the closing of the transactions contemplated by the Merger Agreement without the use of the bridge facility.

              CBOE Holdings has entered into a $1.0 billion senior unsecured delayed draw term facility (subject to increase of up to $1.5 billion in the aggregate) to replace a portion of the bridge facility and also expects to issue the notes offered hereby prior to the completion of the Acquisition in lieu of drawing the remainder amount on the bridge facility. Accordingly, CBOE Holdings does not expect to fund the cash portion of the merger consideration, the repayment of certain indebtedness of Bats and its subsidiaries or related fees and expenses with the bridge facility. For purposes of the pro forma financial statements, the related financing transaction is presented as if $1.0 billion of the funding were provided pursuant to the senior unsecured term facility and the remaining $650 million were provided pursuant to the bridge facility. CBOE Holdings anticipates that the interest that it will ultimately pay once the offering of the notes is complete will be lower than what is assumed in the pro forma financial statements.

              Pursuant to the Merger Agreement, at the effective time of the merger, each outstanding unexercised option to purchase Bats common stock granted under any Bats equity incentive plan, whether vested or unvested ("Bats Stock Options") will be converted into an option to purchase shares of CBOE Holdings common stock ("CBOE Holdings Stock Options"), with the same terms and conditions (including vesting schedule) as were applicable to such Bats Stock Option (but taking into account any changes, including any acceleration of vesting of such Bats Stock Option, occurring by reason of the transactions contemplated by the Merger Agreement). The number of shares of CBOE Holdings common stock subject to each such CBOE Holdings Stock Option will be equal to the number of shares of Bats common stock subject to the corresponding Bats Stock Option immediately prior to the effective time of the merger multiplied by the exchange ratio (subject to certain adjustments and rounding), and the exercise price of such CBOE Holdings Stock Option will be equal to the per share exercise price under the corresponding Bats Stock Option divided by the exchange ratio (subject to certain adjustments and rounding).

              Also pursuant to the Merger Agreement, at the effective time of the merger, each outstanding award of restricted Bats common stock granted under any Bats equity incentive plan ("Bats Restricted Shares") will be assumed by CBOE Holdings and will be converted into an award of restricted shares of CBOE Holdings common stock ("CBOE Holdings Restricted Shares"), subject to the same terms and conditions (including vesting schedule) that applied to the applicable Bats Restricted Shares immediately prior to the effective time of the merger (but taking into account any changes, including any acceleration of vesting of such Bats Restricted Shares, occurring by reason provided for in the Merger Agreement). The number of shares of CBOE Holdings common stock subject to each such award of CBOE Holdings Restricted Shares will be equal to the number of shares of Bats common stock subject to the corresponding Bats Restricted Share award multiplied by the exchange ratio.

2.           Basis of Presentation

              The unaudited pro forma condensed combined financial information has been prepared using the acquisition method of accounting, with CBOE Holdings being the accounting acquirer, and is based on the historical financial statements of CBOE Holdings and Bats. Certain reclassifications have been made to the historical financial statements of Bats to conform to the financial statement presentation to be adopted by CBOE Holdings.

              The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2016 combines the consolidated statements of operations of CBOE Holdings and Bats for the period then ended to give effect to the Acquisition as if it had occurred at the beginning of the period. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2015 combines the consolidated statements of operations of CBOE Holdings and

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Bats for the year then ended to give effect to the Acquisition as if it had occurred at the beginning of the period. The unaudited pro forma condensed combined balance sheet as of September 30, 2016, combines the consolidated balance sheets of CBOE Holdings and Bats as of September 30, 2016 to give effect to the Acquisition as if it had occurred on September 30, 2016.

              The pro forma adjustments include the application of the acquisition method of accounting under purchase accounting guidance. Purchase accounting guidance requires, among other things, that identifiable assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date, which is presumed to be the closing of the Acquisition. Transaction fees for the Acquisition are expensed as incurred and are primarily included in professional fees and outside services. CBOE Holdings and Bats did not incur any transaction expenses related to the Acquisition during the six months ended June 30, 2016 or during 2015. Transaction fees incurred during the three months ended September 30, 2016 were approximately $8.6 million and $3.4 million for CBOE Holdings and Bats, respectively.

              The pro forma adjustments have been developed based on CBOE Holdings' management's judgment, including estimates relating to the allocations of purchase price to the assets acquired and liabilities assumed of Bats based on preliminary estimates of fair value. CBOE Holdings management believes that the assumptions used to derive the pro forma adjustments are reasonable given the information available. However, as the valuations of assets acquired and liabilities assumed are in process and are not expected to be finalized until subsequent to the Acquisition's completion in 2017, and information may become available within the measurement period which indicates a potential change to these valuations, the purchase price allocations may be subject to adjustment. The pro forma financial statements do not reflect any cost savings from potential operating efficiencies, any other potential synergies or any incremental costs which may be incurred in connection with integrating CBOE Holdings and Bats.

              The pro forma financial statements are provided for illustrative purposes only and are not intended to represent what CBOE Holdings' actual consolidated results of operations or consolidated financial position would have been had the Acquisition or the related financing transactions occurred on the dates assumed, nor are they necessarily indicative of CBOE Holdings' future consolidated results of operations or consolidated financial position.

3.           Preliminary Purchase Price Calculation and Allocation

              CBOE Holdings will allocate the purchase price in the Acquisition to the fair value of the Bats assets acquired and liabilities assumed. The pro forma purchase price allocation below has been developed based on preliminary estimates of fair value using the historical financial statements of Bats as of September 30, 2016. In addition, the allocation of the purchase price to acquired intangible assets is based on preliminary fair value estimates and is subject to final management analysis, with the assistance of third-party valuation advisers, at the completion of the Acquisition. The estimated intangible asset values and their useful lives could be impacted by a variety of factors that may become known to CBOE Holdings only upon access to additional information and/or by changes in such factors that may occur prior to the effective time of the merger. The estimated intangible assets are comprised of trading registrations and licenses, customer relationships, technology and other. Additional intangible asset classes may be identified as the valuation process continues. However, such items are currently not expected to be material to the overall purchase price allocation. The residual amount of the purchase price after preliminary allocation to identifiable net assets represents goodwill.

              The total preliminary estimated purchase price of approximately $3.2 billion was determined based on shares of Bats common stock and awards outstanding under Bats' four equity incentive plans (which are referred to as equity awards), as of September 30, 2016. For purposes of the pro forma financial statements, such common stock and equity awards are assumed to remain outstanding as of

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the closing date of the Acquisition. Further, no effect has been given to any other new shares of common stock or other equity awards that may be issued or granted subsequent to September 30, 2016 and before the closing date of the Acquisition. In all cases in which CBOE Holdings' closing stock price is a determining factor in arriving at final merger consideration, the stock price assumed for the total preliminary purchase price is the closing price of CBOE Holdings common stock on December 30, 2016 ($73.89 per share), the most recent date practicable prior to the date of this prospectus supplement. Below is a preliminary purchase price calculation:

 
  Shares   Per
Share
  Purchase
Consideration
(in thousands)
 

Cash consideration for outstanding Bats common stock

    94,811,323   $ 10.00   $ 948,113  

Total cash consideration

                948,113  

Shares of CBOE Holdings common stock issued in exchange for Bats common stock outstanding(1)

    30,349,104   $ 73.89     2,242,495  

CBOE Holdings Stock Options issued in exchange for Bats Stock Options outstanding that do not require post-combination services(2)

    593,375   $ 54.80     32,517  

CBOE Holdings stock options exchanged for Bats stock options that do require post-combination services(2)

    289,676     N/A     8,997  

CBOE Holdings Restricted Shares issued in exchange for Bats Restricted Shares outstanding that do not require post-combination services(3)

    9,601   $ 73.89     709  

CBOE Holdings Restricted Shares issued in exchange for Bats Restricted Shares outstanding that require post-combination services(3)

    706,912     N/A     15,709  

Total stock consideration

                2,300,427  

Total preliminary estimated purchase price

              $ 3,248,540  

(1)
The number of shares of CBOE Holdings common stock issued was determined based on the conversion factor of 0.3201 of a share of CBOE Holdings common stock for each issued and outstanding share of Bats common stock.

(2)
The number of CBOE Holdings Stock Options issued was determined based on 1,946,038 Bats Stock Options outstanding as of September 30, 2016 multiplied by an exchange factor of 0.4534 per award. The Merger Agreement provides that the number of shares of CBOE Holdings common stock subject to each CBOE Holdings Stock Option into which each Bats Stock Option is converted will be equal to the number of shares of Bats common stock subject to the corresponding Bats Stock Option immediately prior to the effective time of the merger multiplied by the exchange ratio, which is the sum of (a) 0.3201 of a share of CBOE Holdings common stock and (b) the quotient obtained by dividing $10.00 by the closing CBOE Holdings VWAP. The calculated closing volume weighted average price for December 30, 2016 was $75.0021, which was the assumed closing CBOE Holdings VWAP for purposes of this calculation. The per share price in the table is the weighted average fair value for all CBOE Holdings replacement stock options. Ninety-one percent of the fair value of the replacement awards is included in the purchase consideration above, as this amount represents the fair value attributable to the service period completed prior to the Acquisition date. The remaining service period will be completed post-Acquisition, and future vesting and expense will be recognized accordingly.

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(3)
The number of CBOE Holdings Restricted Shares issued was determined based on 1,580,196 unvested Bats Restricted Shares as of September 30, 2016 multiplied by an exchange factor of 0.4534 per award. The Merger Agreement provides that the number of shares of CBOE Holdings common stock into which each such award of CBOE Holdings Restricted Shares is converted will be equal to the number of shares of Bats common stock subject to the corresponding Bats Restricted Share award multiplied by the exchange ratio, which is the sum of (a) 0.3201 of a share of CBOE Holdings common stock and (b) the quotient obtained by dividing $10.00 by the closing CBOE Holdings VWAP. The calculated closing volume weighted average price for December 30, 2016 was $75.0021, which was the assumed closing CBOE Holdings VWAP for purposes of this calculation. Only 31.0% of the fair value of the replacement awards is included in the purchase consideration above, as this amount represents the fair value attributable to the service period completed prior to the Acquisition date. The remaining service period will be completed post-Acquisition and future vesting and expense will be recognized accordingly.

              The preliminary purchase price calculation was based on the number of unvested shares of Bats common stock, Bats Stock Options and Bats Restricted Shares as of September 30, 2016, disclosed in Bats' Quarterly Report on Form 10-Q for the quarter ended September 30, 2016. The cash component of the purchase price was a product of the shares of Bats common stock assumed to be outstanding multiplied by $10.00 per share. The value for CBOE Holdings common stock to be exchanged for Bats common stock was calculated by applying the conversion factor of 0.3201 of a share of CBOE Holdings common stock for each share of Bats common stock outstanding, multiplied by the closing price per share of CBOE Holdings common stock as reported on NASDAQ of $73.89 at market close on December 30, 2016. Outstanding Bats Stock Options were valued using a Black Scholes model, utilizing the closing price per share of CBOE Holdings common stock as reported on NASDAQ of $73.89 at market close on December 30, 2016, volatility rates, risk-free interest rates and expected lives for the stock options (each as detailed in the following table), and a dividend yield of 1.50%, after converting the number of outstanding Bats Stock Options and their associated exercise prices based on the defined conversion ratio in the Merger Agreement.

Valuation of Bats Stock Options

Original Grant Date
  Volatility Rate   Risk-Free
Interest Rate
  Expected Option
Life (Years)
 

May 2009

    19.15 %   0.76 %   1.292  

December 2009

    18.88 %   0.77 %   1.603  

February 2010

    18.95 %   0.78 %   1.667  

July 2010

    18.94 %   0.79 %   1.875  

December 2014

    19.39 %   1.13 %   4.381  

              CBOE Holdings will issue replacement CBOE Holdings Restricted Shares for the outstanding Bats Restricted Shares on the closing date of the Acquisition. The fair value of the replacement CBOE Holdings Restricted Shares attributable to service periods completed prior to the effective time of the Acquisition has been included in the purchase price consideration, and the fair value of the replacement CBOE Holdings Restricted Shares attributable to service periods completed after the effective time of the Acquisition will be expensed prospectively by CBOE Holdings.

              The estimated consideration expected to be transferred reflected in the unaudited pro forma condensed combined financial information does not purport to represent what the actual consideration transferred will be when the Acquisition is consummated. In accordance with purchase accounting guidance, the fair value of equity securities issued as part of the consideration transferred will be measured on the closing date of the Acquisition at the then-current market price. This requirement will likely result in a per share equity component that differs from the $73.89 (the closing price per share of

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CBOE Holdings common stock as reported on NASDAQ at market close on December 30, 2016) assumed in the unaudited pro forma financial statements, and that difference may be material. CBOE Holdings believes that a price volatility of as much as 10% in the price of CBOE Holdings common stock on the closing date of the Acquisition from the price of CBOE Holdings common stock assumed in the unaudited pro forma condensed combined financial information is reasonably possible based upon the recent history of the price of CBOE Holdings common stock. A 10% fluctuation in the market price of CBOE Holdings common stock would affect the value of the merger consideration with a corresponding change to goodwill, as illustrated in the table below:

 
  Estimated
Merger
Consideration
  Estimated
Goodwill
 
 
  (in thousands)
 

As presented in the pro forma adjustments

  $ 3,248,540   $ 1,457,545  

10% increase in common stock price

    3,472,790     1,681,795  

10% decrease in common stock price

    3,024,291     1,233,296  

              Below is the preliminary purchase price allocation for the merger:

Preliminary purchase price allocation (in thousands)
   
 

Net tangible assets (liabilities)

  $ (510,183 )

Identifiable intangible assets

    3,205,000  

Net deferred tax liability

    (903,822 )

Goodwill

    1,457,545  

Total preliminary purchase price

  $ 3,248,540  

4.           The unaudited pro forma condensed combined balance sheet reflects the following adjustments: Pro Forma Adjustments—Balance Sheet (in thousands, except percentages)

              A.    Adjusted to reflect the use of cash on hand to fund a portion of the cash consideration related to the Merger Agreement comprised of the following:

Proceeds from the senior unsecured term facility

  $ 1,000,000  

Proceeds from the bridge facility

    650,000  

Cash paid for Bats common stock

    (948,113 )

Refinance Bats term loan (balance as of September 30, 2016)

    (613,375 )

Financing fees and expenses

    (8,426 )

Net impact on cash balance

  $ 80,086  

              B.    Accounts payable adjusted for estimated transaction fees of $36,803. The related tax impact is $10,024.

              C.    To record the incurrence of new short-term debt under the bridge facility to fund a portion of the cash consideration of the Acquisition and pay off the historical Bats debt, the following adjustment was made:

Borrowing under the CBOE Holdings bridge facility

  $ 650,000  

Less: Financing costs associated with the bridge facility

    (7,968 )

Net issuance of short-term debt

    642,032  

Paydown existing Bats short-term obligations

    (4,123 )

Net change in short-term debt

  $ 637,909  

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              CBOE Holdings expects to issue the notes offered hereby in lieu of borrowing under the bridge facility. The notes will be carried on the balance sheet as long-term debt.

              D.    Adjusted the net book value of Bats' investment in EuroCCP to estimated fair value.

 
  Historical
Amount, net
  Preliminary
Fair Value
  Increase
(Decrease)
 

Investment in EuroCCP

  $ 11,222   $ 11,722   $ 500  

              Adjustment based on discounted cash flows.

              E.    Adjusted to eliminate historical Bats goodwill and intangible assets.

              F.     Adjusted to record the preliminary estimated fair value of goodwill. Goodwill resulting from the acquisition of Bats by CBOE Holdings is not amortized. Goodwill will be assessed for impairment at least annually in accordance with ASC 350, Intangibles—Goodwill and Other.

              G.    Adjusted to record identifiable intangible assets at their preliminary estimated fair values. Fair values for trade name and open interest intangible assets have been estimated using an income approach. Fair values for all other intangible assets were estimated using a multi-period excess earnings method. Amortization expense has been calculated using a straight-line method over the estimated useful life.

 
  Historical
Amount,
net
  Preliminary
Fair
Value
  Increase
(Decrease)
  Estimated
Useful
Life—Years
  Annual
Amortization
  Nine
Months
Amortization
 

Trademark and trade names

  $ 19,700   $ 25,000   $ 5,300   4   $ 6,250   $ 4,688  

Customer relationships

    162,497     1,100,000     937,503   25     44,000     33,000  

Trading registration and licenses

    80,903     1,900,000     1,819,097   Indefinite              

Trading permit holder relationships—Hotspot

        100,000     100,000   12     8,333     6,250  

Technology

    13,100     80,000     66,900   7     11,429     8,571  

Non-compete

    5,830           (5,830 )                

Domain names

    217           (217 )                

Less: Accumulated amortization

    (64,023 )         64,023                  

  $ 218,224   $ 3,205,000   $ 2,986,776       $ 70,012   $ 52,509  

              H.    To record the incurrence of new long-term debt under the senior unsecured term facility to fund a portion of the cash consideration of the Acquisition and pay off the historical Bats debt, the following adjustment was made:

Borrowing under the senior unsecured term facility

  $ 1,000,000  

Less: Financing costs associated with the term facility

    (5,175 )

Net issuance of long-term debt

    994,825  

Paydown existing Bats long-term obligations

    (595,151 )

Net change in long-term debt

  $ 399,674  

              The notes will be carried on the balance sheet as long-term debt and such long-term debt would be in addition to the net change in long-term debt described in this Note H.

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              I.     Adjusted to record net deferred tax liabilities related to tangible assets and liabilities and identifiable intangible assets.

Fair value of identified intangible assets

  $ 3,205,000  

Write-off of Bats existing intangible assets

    (218,224 )

Write-off of Bats existing goodwill

    (727,221 )

    2,259,555  

Estimated tax rate

    40 %

Net deferred tax asset resulting from allocation of purchase price

  $ 903,822  

              J.     The following adjustments were made to stockholders' equity to eliminate Bats historical equity balances, to reflect the issuance of common stock in connection with the Acquisition, and record the impact of the replacement awards granted in connection with the Acquisition:

New shares of CBOE Holdings common stock issued in exchange for Bats common stock

  $ 2,242,495  

Preliminary fair value of Bats stock options and restricted stock units exchanged in merger

    57,931  

Transaction expense, net of tax

    (26,779 )

Loss on early retirement of debt

    (14,101 )

Elimination of Bats historical stockholders' equity

    (434,762 )

  $ 1,824,784  

5.           Pro Forma Adjustments—Statement of Operations

              The unaudited pro forma condensed combined statement of operations reflect the following adjustments:

              K.    Adjusted to reverse amortization of Bats intangible assets and record amortization of identified intangibles as follows:

 
  Amortization
Expense
for the year ended
December 31, 2015
  Amortization Expense
for the nine months
ended September 30,
2016
 
 
  (in thousands)
 

Reverse amortization recorded by Bats on intangible assets

  $ (26,900 ) $ (20,481 )

Record amortization of identified intangible assets acquired by CBOE Holdings

    70,012     52,509  

  $ 43,112   $ 32,028  

              L.    Eliminated non-recurring incremental costs of the acquisition of Bats by CBOE Holdings incurred in the three months ended September 30, 2016.

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              M.   Adjusted to record anticipated borrowings by CBOE Holdings to finance the cash payment of $948 million to Bats shareholders as part of the merger consideration and $613 million to refinance existing Bats short- and long-term debt.

 
  Interest Expense
for the year ended
December 31, 2015
  Interest Expense
for the nine months
ended September 30, 2016
 
 
  (in thousands, except percentages)
 

Anticipated borrowings

  $ 1,650,000   $ 1,650,000  

Weighted average interest rate

    3.168 %   3.099 %

Stated interest

    52,278     38,351  

Amortization of capitalized debt costs

    9,214     6,887  

Reverse interest recorded on existing Bats short- and long-term debt

    (46,593 )   (30,172 )

Total pro forma adjustments

  $ 14,899   $ 15,066  

              The unaudited pro forma adjustment for the year ended December 31, 2015 and the period ended September 30, 2016 respectively reflects a full year and nine months of interest expense using the same assumptions. If the all-in variable interest rates were to increase by 12.5 basis points, this would result in approximately $2.1 million and $1.3 million in additional interest expense for the year ended December 31, 2015 and the nine months ended September 30, 2016, respectively. CBOE Holdings anticipates that the interest that it will ultimately pay once the offering of the notes is complete will be lower than what is assumed in the pro forma financial statements.

              N.    Adjusted to record the tax effect on pro forma adjustments at a combined U.S. (federal and state) statutory income tax rate of 40%.

              O.    Adjusted the weighted average number of shares outstanding used to determine basic and diluted pro forma earnings per share based on the exchange of Bats common stock for CBOE Holdings common stock as follows:

 
  Year ended
December 31, 2015
  Nine Months Ended
September 30, 2016
 
 
  (in thousands, except ratios)
 

Basic calculation:

             

Bats historical weighted average shares outstanding

    94,575     94,800  

Exchange ratio

    0.3201     0.3201  

CBOE Holdings new shares issued

    30,273     30,345  

Pro forma adjustment

    (64,302 )   (64,455 )

Diluted calculation

             

Bats historical weighted average shares outstanding

    94,986     96,400  

Exchange ratio

    0.3201     0.3201  

CBOE Holdings new shares issued

    30,406     30,858  

Pro forma adjustment

    (64,580 )   (65,542 )

6.           Reclassifications

              The reclassifications, as presented in the pro forma financial statements, result in consistency of reporting between CBOE Holdings and Bats with no impact on net expenses.

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DESCRIPTION OF CERTAIN OTHER INDEBTEDNESS

              Set forth below is a summary of certain financing arrangements of CBOE Holdings. The following summary is not a complete description of the terms of these financing arrangements and is qualified in its entirety by reference to the applicable governing agreements, which are included as exhibits to CBOE Holdings' filings with the SEC incorporated by reference in this prospectus supplement and the accompanying prospectus. See "Where You Can Find More Information."

              As of September 30, 2016, we had no long-term or short-term debt.

New Term Loan

              On December 15, 2016, CBOE Holdings, as borrower, entered into a Term Loan Credit Agreement (the "Term Loan Agreement") with Bank of America, N.A., as Administrative Agent (the "Term Loan Agent"), certain lenders named therein, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Bookrunner, Morgan Stanley MUFG Loan Partners, LLC, as Syndication Agent, and Citibank, N.A., PNC Bank, National Association and JPMorgan Chase Bank, N.A., as Co-Documentation Agents.

              The Term Loan Agreement provides for a senior unsecured delayed draw term loan facility (the "Term Loan Facility") in an aggregate principal amount of $1.0 billion. We may also, subject to the agreement of the applicable lenders, increase the commitments under the Term Loan Agreement by up to $500 million for a total of $1.5 billion. Proceeds from the Term Loan Facility, if drawn, may be used (i) to finance in part the Acquisition, (ii) to repay certain of Bats' existing indebtedness, (iii) to pay fees and expenses incurred in connection with the Acquisition and (iv) to fund working capital needs and for other general corporate purposes. The availability of the commitments under the Term Loan Agreement is conditioned upon, among other things, confirmation that the Acquisition has been consummated, or will be consummated substantially concurrently with the extension of the loans under the Term Loan Agreement.

              Commitments under the Term Loan Agreement will expire on the earlier of (i) the consummation of the Acquisition (after giving effect to the funding of the committed loans in accordance with and subject to the terms of the Term Loan Agreement), (ii) July 25, 2017 (or if the outside date is extended pursuant to the terms of the Merger Agreement, October 23, 2017), (iii) the closing of the Acquisition without using the loans under the Term Loan Agreement and (iv) the termination of the Merger Agreement in accordance with the terms thereof. Loans under the Term Loan Agreement, if drawn, will mature five years following the closing date of the Acquisition. The Term Loan Facility is unsecured and is not guaranteed by any of our subsidiaries.

              Loans under the Term Loan Agreement will bear interest, at our option, at either (i) the London Interbank Offered Rate ("LIBOR") periodically fixed for an interest period (as selected by us) of one, two, three or six months plus a margin (based on our public debt ratings) ranging from 1.00 percent per annum to 1.75 percent per annum or (ii) a daily floating rate based on the Term Loan Agent's prime rate (subject to certain minimums based upon the federal funds effective rate or LIBOR) plus a margin (based on our public debt ratings) ranging from zero percent per annum to 0.75 percent per annum. We will be required to pay a ticking fee to the Term Loan Agent for the account of the lenders which will initially accrue at a rate (based on our public debt ratings) ranging from 0.10 percent per annum to 0.30 percent per annum multiplied by the undrawn aggregate commitments of the lenders in respect of the Term Loan Facility, accruing during the period commencing on December 15, 2016 and ending on the earlier of (i) the date on which the loans are drawn and (ii) the termination of the commitments under the Term Loan Agreement in accordance with the terms thereof.

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              The Term Loan Agreement contains customary representations, warranties and affirmative and negative covenants for facilities of its type, including financial covenants, events of default and indemnification provisions in favor of the lenders. The negative covenants include restrictions regarding the incurrence of liens (except permitted liens), the incurrence of indebtedness by our subsidiaries and fundamental changes, subject to certain exceptions in each case. The financial covenants require us to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio of not less than 4.00 to 1.00 and a maximum consolidated leverage ratio of not greater than 3.50 to 1.00.

New Revolving Facility

              On December 15, 2016, CBOE Holdings, as borrower, entered into a Credit Agreement (the "Revolving Credit Agreement") with Bank of America, N.A., as Administrative Agent (the "Revolver Agent") and as Swing Line Lender, certain lenders named therein, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Bookrunner, Morgan Stanley MUFG Loan Partners, LLC, as Syndication Agent, and Citibank, N.A., PNC Bank, National Association and JPMorgan Chase Bank, N.A., as Co-Documentation Agents.

              The Revolving Credit Agreement provides for a senior unsecured $150 million five-year revolving credit facility (the "Revolving Credit Facility") that includes a $25 million swing line sub-facility. We may also, subject to the agreement of the applicable lenders, increase the commitments under the Revolving Credit Facility by up to $100 million, for a total of $250 million. The Revolving Credit Agreement provides that we may obtain, subject to the satisfaction of customary conditions, loans in U.S. Dollars, Euros and Pounds Sterling. Subject to specified conditions, we may designate one or more of our subsidiaries as additional borrowers under the Revolving Credit Agreement provided that CBOE Holdings guarantees all borrowings and other obligations of any such subsidiaries under the Revolving Credit Agreement. As of December 31, 2016, no subsidiaries were designated as additional borrowers.

              Funds borrowed under the Revolving Credit Agreement may be used to fund working capital and for other general corporate purposes. As of December 31, 2016, no borrowings were outstanding under the Revolving Credit Agreement. Accordingly, at December 31, 2016, $150 million of borrowing capacity was available for the purposes permitted by the Revolving Credit Agreement.

              Loans under the Revolving Credit Agreement will bear interest, at our option, at either (i) LIBOR periodically fixed for an interest period (as selected by us) of one, two, three or six months plus a margin (based on our public debt ratings) ranging from 1.00 percent per annum to 1.75 percent per annum or (ii) a daily floating rate based on the Revolver Agent's prime rate (subject to certain minimums based upon the federal funds effective rate or LIBOR) plus a margin (based on our public debt ratings) ranging from zero percent per annum to 0.75 percent per annum.

              Subject to certain conditions stated in the Revolving Credit Agreement, we may borrow, prepay and reborrow amounts under the Revolving Credit Facility at any time during the term of the Revolving Credit Agreement. The Revolving Credit Agreement will terminate and all amounts owing thereunder will be due and payable on December 15, 2021, unless the commitments are terminated earlier, either at our request or, if an event of default occurs, by the lenders (or automatically in the case of certain bankruptcy-related events). The Revolving Credit Agreement contains customary representations, warranties and affirmative and negative covenants for facilities of its type, including financial covenants, events of default and indemnification provisions in favor of the lenders. The negative covenants include restrictions regarding the incurrence of liens (except permitted liens), the incurrence of indebtedness by our subsidiaries and fundamental changes, subject to certain exceptions in each case. The financial covenants require us to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio of not less than 4.00 to 1.00 and a maximum consolidated leverage ratio of not greater than 3.50 to 1.00.

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DESCRIPTION OF NOTES

              The notes will be issued under an indenture, to be dated as of January 12, 2017, between us and Wells Fargo Bank, National Association, as trustee (the "trustee"), as amended or supplemented from time to time (the "indenture"). The following discussion includes a summary description of certain material terms of the indenture. Because this is a summary, it does not include all of the information that is included in the indenture. You can find the definitions of certain terms used below under the subheading "—Certain Defined Terms." For purposes of this section, references to "CBOE Holdings," "we," "us" and "our" refer only to CBOE Holdings, Inc. and not to any of its subsidiaries.

              You should read the indenture carefully and in its entirety. The terms of the notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended. You may request a copy of the indenture at our address set forth under "Where You Can Find More Information."

General

              The notes constitute a series of notes that will initially be limited to $650,000,000 aggregate principal amount and will mature on January 12, 2027. The notes will bear interest at 3.650% per year. We will pay interest on the notes semi-annually in arrears on January 12 and July 12 of each year commencing on July 12, 2017 to the person in whose name the notes (or any predecessor note) is registered at the close of business on December 28 or June 27, respectively, preceding such interest payment date (whether or not a business day). Interest on the notes will be calculated on the basis of a 360-day year consisting of 12 months of 30 days each. If any interest payment date, maturity date, redemption date or other payment date with respect to the notes is not a business day, then the relevant interest payment will be postponed until the first following business day and no additional interest will accrue thereon for the period from and after such interest payment date, maturity date, redemption date or other payment date.

              The notes will be issued in fully registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The notes will be exchangeable and transfers thereof will be registrable at an office or agency maintained by us for such purpose (which initially will be the corporate trust office of the trustee).

              We do not intend to apply to list the notes on any securities exchange or to have the notes quoted on any automated quotation system.

              The indenture does not contain any provisions that would limit our ability or the ability of any of our Subsidiaries to incur indebtedness.

Ranking

              The notes will be our senior unsecured obligations, will rank equally in right of payment with all our other existing and future senior unsecured debt, including all other unsubordinated notes issued under the indenture, from time to time outstanding, will be effectively junior to our secured indebtedness, to the extent of the value of the assets securing such indebtedness, and will be structurally subordinated to the secured and unsecured debt of our Subsidiaries. The notes will be exclusively our obligation, and not the obligation of any of our Subsidiaries. Our rights and the rights of any holder of notes (or other of our creditors) to participate in the assets of any Subsidiary of ours upon that Subsidiary's liquidation or recapitalization will be subject to the prior claims of the Subsidiary's creditors, except to the extent that we may be a creditor with recognized claims against the Subsidiary.

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Sinking Fund

              The notes will not be subject to any sinking fund.

Further Issuances

              We may, from time to time, without giving notice to or seeking the consent of the holders or beneficial owners of the notes, increase the principal amount of the notes under the indenture and issue additional notes having the same ranking, interest rate, maturity and other terms (except for the issue date, issue price and, in some cases, the first interest payment date, and the date from which interest will begin to accrue) as the notes being offered hereby. We will not, however, issue such additional notes with the same CUSIP number as the notes being offered hereby if they are not fungible for U.S. federal income tax purposes with the notes being offered hereby. Any such additional notes will constitute part of the same series as the notes being offered hereby.

Optional Redemption

              We may, at our option, redeem the notes, in whole or in part, at any time and from time to time prior to October 12, 2026 (the date that is three months prior to their maturity date) (the "Par Call Date") on not less than 30 nor more than 60 days' prior notice transmitted to the holders of the notes to be redeemed. The notes will be so redeemable at a redemption price equal to the greater of (1) 100% of the principal amount of the notes to be redeemed and (2) the sum of the remaining scheduled payments of principal and interest on the notes to be redeemed that would be due after the related redemption date to, but excluding, the Par Call Date but for such redemption (except that, if such redemption date is not an interest payment date with respect to the notes, the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued and unpaid thereon to the redemption date), discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20 basis points, plus, in the case of both clauses (1) and (2) above, accrued and unpaid interest on the notes being redeemed, if any, to, but excluding, such redemption date. We will be required to notify the trustee of the redemption price with respect to any redemption promptly after the calculation and the trustee will not be responsible for such calculation.

              At any time on and after the Par Call Date, we may, at our option, redeem the notes in whole or in part, at any time and from time to time on not less than 30 nor more than 60 days' prior notice transmitted to the holders of notes to be redeemed. The notes will be so redeemable at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest on the notes to be redeemed, if any, to, but excluding, the date of redemption.

              Notwithstanding the foregoing, payments of interest on the notes that are due and payable on any interest payment date falling on or prior to a date fixed for redemption of any notes will be payable to the holders of those notes registered as such at the close of business on the relevant record date according to their terms and the terms and provisions of the indenture.

              "Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Par Call Date.

              "Comparable Treasury Price" means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (2) if we obtain fewer than four such Reference Treasury Dealer Quotations, the average of all such Quotations.

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              "Independent Investment Banker" means one of the Reference Treasury Dealers appointed by us.

              "Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and their respective successors and two other nationally recognized investment banking firms that are primary U.S. Government securities dealers in New York City (each, a "Primary Treasury Dealer") specified from time to time by us, except that if any of the foregoing ceases to be a Primary Treasury Dealer, we are required to designate as a substitute another nationally recognized investment banking firm that is a Primary Treasury Dealer.

              "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by us, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to us by such Reference Treasury Dealer as of 3:30 p.m., New York City time, on the third business day preceding such redemption date.

              "Treasury Rate" means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity (computed as of the second business day immediately preceding such redemption date) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

              On and after any redemption date, interest will cease to accrue on the notes called for redemption. On or prior to any redemption date, we are required to deposit with a paying agent money sufficient to pay the redemption price of and accrued interest on the notes to be redeemed on such date. If less than all the notes are to be redeemed, (a) if such notes are represented by global notes, interests in such global notes will be selected for redemption in accordance with the customary procedures of The Depository Trust Company ("DTC"), or (b) if such notes are represented by notes in certificated form, the trustee will select the notes to be redeemed by such method as the trustee deems fair and appropriate in accordance with methods generally used at the time of selection by indenture trustees in similar circumstances.

Special Mandatory Redemption

              In the event that the Acquisition has not occurred on or prior to October 23, 2017, or the Merger Agreement is terminated other than in connection with the consummation of the Acquisition and is not otherwise amended or replaced, we will be required to redeem all outstanding notes on a special mandatory redemption date at a redemption price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the special mandatory redemption date (the "special mandatory redemption price"). The "special mandatory redemption date" means the earlier to occur of (1) the tenth business day following October 23, 2017, if the merger has not been completed on or prior to October 23, 2017, or (2) the 30th day (or if such day is not a business day, the first business day thereafter) following the termination of the Merger Agreement for any reason. Notwithstanding the foregoing, installments of interest on the notes that are due and payable on an interest payment date falling on or prior to the special mandatory redemption date will be payable on such interest payment date to the registered holders as of the close of business on the relevant record date in accordance with the notes and the indenture.

              We will cause the notice of special mandatory redemption to be transmitted, with a copy to the trustee, within ten business days after the occurrence of the event triggering the special mandatory redemption to each holder at its registered address. If funds sufficient to pay the special mandatory redemption price of the notes to be redeemed on the special mandatory redemption date are deposited with the trustee or a paying agent on or before such special mandatory redemption date, on and after such special mandatory redemption date, the notes will cease to bear interest.

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Change of Control

              If a Change of Control Triggering Event occurs, unless we have exercised our right to redeem the notes in whole or the conditions to a special mandatory redemption have occurred, as described above under "—Optional Redemption" and "—Special Mandatory Redemption," holders of notes will have the right to require us to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of their notes pursuant to the offer described below (the "Change of Control Offer"). In the Change of Control Offer, we will be required to offer payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest, if any, on the notes repurchased, to, but excluding, the date of repurchase (the "Change of Control Payment"); provided that, notwithstanding the foregoing, payments of interest on notes that are due and payable on any interest payment date falling on or prior to such date of repurchase will be payable to the holders of the notes registered as such at the close of business on the relevant record date according to their terms and the terms and provisions of the indenture.

              Within 30 days following any Change of Control Triggering Event or, at our option, prior to any Change of Control, but after public announcement of the transaction or transactions that constitute or may constitute the Change of Control, we will (unless we have exercised our right to redeem the notes in whole or a special mandatory redemption event has occurred) be required to transmit a notice to holders of notes and the trustee describing the transaction or transactions that constitute or may constitute the Change of Control Triggering Event and offering to repurchase the notes on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is sent (the "Change of Control Payment Date"), which offer will constitute the Change of Control Offer. The notice will, if sent prior to the date on which the Change of Control occurs, state that the Change of Control Offer is conditioned on the Change of Control Triggering Event occurring on or prior to the applicable Change of Control Payment Date.

              Holders of notes electing to have a note or portion thereof repurchased pursuant to a Change of Control Offer will be required to surrender the note (which, in the case of global notes, must be made in accordance with the procedures of DTC, as depositary for such notes) to the trustee under the indenture (or to such other person as may be designated by us for such purpose) as provided in the applicable Change of Control notice prior to the close of business on the third business day immediately preceding the applicable Change of Control Payment Date and to comply with other procedures and requirements set forth in such Change of Control notice.

              On the Change of Control Payment Date, we will be required, to the extent lawful, to:

              Interest on notes and portions of notes properly tendered for repurchase pursuant to a Change of Control Offer and not withdrawn will cease to accrue on and after the applicable Change of Control Payment Date, unless we shall have failed to accept such notes and such portions of notes for payment or failed to deposit the Change of Control Payment in respect thereof in accordance with the immediately preceding paragraph. We will promptly pay, or cause the trustee or a paying agent for the notes to promptly pay (by application of funds deposited by us as aforesaid), to each holder of notes (or portions thereof) properly tendered and not withdrawn and accepted for payment by us pursuant to such Change of Control Offer, the Change of Control Payment for such notes. In the case of any note

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repurchased in part, the trustee will promptly authenticate and mail (or cause to be delivered by book-entry transfer) to the holder a new note equal in principal amount to any unrepurchased portion of the note repurchased in part.

              We will not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by us and the third party repurchases all notes properly tendered and not withdrawn under its offer. In addition, we will not be required to repurchase any notes if we have given written notice of a redemption in whole of the notes as provided under "—Optional Redemption" or "—Special Mandatory Redemption."

              To the extent that we are required to offer to repurchase the notes upon the occurrence of a Change of Control Triggering Event, we may have a similar obligation with regard to certain of our other then-outstanding indebtedness. We may not have sufficient funds to repurchase the notes and such other indebtedness for cash at that time. In addition, our ability to repurchase the notes or such other indebtedness for cash may be limited by law or the terms of other agreements relating to our indebtedness that is outstanding at the time. The failure to make a required repurchase of the notes would, or such other indebtedness could, result in a default under the indenture.

              We will be required to comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions, we will be required to comply with the applicable securities laws and regulations and will not be deemed to have breached our obligations under the Change of Control provisions by virtue of such compliance. The trustee shall not be responsible for monitoring our rating status, making any request upon any Rating Agency, or determining whether any Rating Event has occurred.

              For purposes of the foregoing discussion of a repurchase at the option of holders, the following definitions are applicable:

              "Change of Control" means the occurrence of any of the following: (1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties and assets of us and our Subsidiaries taken as a whole to any Person other than us or one of our Subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any Person becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of our Voting Stock or other Voting Stock into which our Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares; (3) we consolidate with, or merge with or into, any Person, or any Person consolidates with, or merges with or into us, in any such event pursuant to a transaction in which any of the outstanding shares of our Voting Stock or the Voting Stock of such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of our Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the resulting or surviving Person or any direct or indirect parent company of the resulting or surviving Person immediately after giving effect to such transaction; or (4) the adoption of a plan providing for the liquidation or dissolution of CBOE Holdings. Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control under clause (2) or (3) above if (i) we become a direct or indirect wholly owned Subsidiary of a holding company and (ii)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same (in our good faith judgment) as the holders of our Voting Stock immediately prior to that transaction or (B) immediately following that transaction no Person (other than a holding company satisfying the requirements of this sentence)

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