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

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

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

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

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

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

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

In October, a media report said CME Group , the world's largest derivatives exchanges operator, was in informal talks to buy CBOE, which is still the largest independent exchange in North America.

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

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

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

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

(Reporting by Doris Frankel; Editing by Andrew Hay)