Michael Spencer’s NEX Group Plc rose the most in almost two decades after CME Group Inc. (CME.O), a futures trading giant, approached the company on a potential takeover.

NEX, which runs markets for trading currencies and treasuries, confirmed it’s in the early stages of negotiating with CME, an hour after Bloomberg reported on their discussions on Thursday. No agreement may be reached, NEX said. A representative of CME declined to comment.

NEX, which has a market value of about 3.4 billion pounds (US$4.8 billion), could also attract interest from other exchange operators, according to two people familiar with the matter who asked not to be named discussing a private matter.

CME Chief Executive Officer Terry Duffy built the Chicago-based company into a powerhouse in part through takeovers, including deals for the Chicago Board of Trade and New York Mercantile Exchange. Formerly known as ICAP, NEX runs markets for trading currencies, Treasuries and other assets. That business complements CME, which offers derivatives on many of the same things. The roots of NEX date back more than 30 years to the brokerage called Intercapital, founded by Spencer, a former Conservative Party treasurer.

NEX shares rose as much as 39 per cent, the biggest gain since November 1998. They were up 226 pence at 883 pence at 11:03 a.m. London time on Friday. CME’s shares rose 1.5 per cent to US$165.39 at Thursday’s closing price, their first gain after three straight days of losses.

Justin Bates, an analyst at Liberum Capital Ltd., expects a bid to come and at a substantial premium to Thursday’s close, he wrote in a research note. This is because earnings growth is forecast to be strong and “NEX is a valuable, strategically important asset and integral to global financial infrastructure.”

“In a competitive situation we can easily see NEX commanding a price” of more than 1,000 pence a share, said Bates.

NEX “would make an appealing acquisition target as financial infrastructure continues to consolidate,” analysts at Numis Securities including Marcus Barnard wrote in a note to investors. London Stock Exchange Group Plc would be a “strong candidate as a suitor,” while other interest could come from Deutsche Boerse AG, or Singapore’s SGX, they wrote.

ICAP was once the biggest interbank derivatives brokerage. NEX CEO Spencer sold that part of his company in 2016 to Tullett Prebon, which renamed itself TP ICAP Plc, leaving NEX focused on electronic trading and post-trade services.

--With assistance from Will Hadfield Matthew Monks and Aaron Kirchfeld