Chicago exchanges reach $1 billion settlement

The Chicago Board Options Exchange and the Chicago Board of Trade have agreed on a tentative settlement to a long-standing legal dispute over trading rights.

The settlement announced Monday is valued at roughly $1 billion. It clears the way for the options exchange to become the third financial exchange in Chicago to demutualize and go public.

The adjacent but rival Board of Trade -- owned by CME Corporation -- and options exchange have been embroiled for nearly two years in a lawsuit by Board of Trade members in a Delaware court.

The settlement calls for Board of Trade members to get $300 million plus an 18 percent equity interest in a demutualization of the options exchange. The CBOE has been valued at anywhere from $2.5 billion to $6 billion.