With the crucial vote less than a week away, the Chicago Mercantile Exchange (CME) and IntercontinentalExchange (ICE) continue to turn up the intensity in their respective pursuits of acquiring and merging with the Chicago Board of Trade (CBOT). On Tuesday, ICE resubmitted its merger proposal to CBOT, while CME touted the approval of its bid by additional advisory firms.

“Today ICE delivered to CBOT Holdings a signed merger agreement affirming its existing superior merger proposal to the board of directors of CBOT Holdings,” Atlanta-based ICE said Tuesday. “CBOT Holdings may accept ICE’s merger proposal, subject to absence of material changes in the business of CBOT Holdings and certain other conditions, by countersigning the merger agreement and returning it to ICE at any time before 5:00 pm (Central time) on July 12, 2007 if CBOT Holdings stockholders and members reject the CME transaction and the CME merger agreement is terminated.”

Over the past two months, the back and forth battle for CBOT’s hand has intensified as CME and ICE have taken their turns touting their proposals while attempting to discredit the opposing offer (see Daily GPI, July 2). While CME’s offer has the approval of CBOT’s board, ICE continues to attempt to convince CBOT’s membership and shareholders that its offer is “superior” on all fronts. CBOT’s shareholders are scheduled to vote Monday on the CME merger proposal.

ICE said Tuesday it remains fully committed to an ICE/CBOT combination. “Over the past several months we have listened to CBOT members and stockholders and tried to address in our proposal a number of their concerns. We believe that through renewed discussions with the CBOT Holdings board, however, ICE may be better able to address these concerns,” ICE said. “To that end, we are prepared to enter into a dialogue with CBOT Holdings so that ICE can present CBOT Holdings stockholders and Chicago Board of Trade members a transaction that fully addresses the value of the exchange, as well as the unique components of that value, in addition to the binding proposal we have made today. We stand ready to engage in discussions regarding an enhanced CBOE exercise rights agreement [see Daily GPI, May 31], as well as other creative solutions to preserve the value of, and provide liquidity for, B-1 and B-2 memberships, including a possible tender offer.

“The fact remains that since March 15th, ICE has proposed a superior transaction that has not been matched by CME. We continue to urge CBOT stockholders and members to reject the inferior CME proposal by voting ‘NO’ on July 9, and preserve their opportunity to evaluate the superior ICE alternative, which has now been offered on a binding basis.”

CME announced Tuesday that Glass Lewis & Co., a proxy advisory firm, and Egan-Jones Ratings Co., an investor-driven ratings firm, have recommended that CME Holdings shareholders vote for the merger with CBOT at the special shareholders meeting scheduled for July 9. CME said these two endorsements are in addition to the recommendation last week from Institutional Shareholder Services Inc., which urged CME and CBOT shareholders to vote for the merger.

“The combination will result in the creation of the world’s largest exchange company with a diverse product offering,” said Glass Lewis & Co. “Furthermore, the board believes that the combined company would be better positioned to compete in the rapidly consolidating exchange industry.”

For its part, the board of directors of CBOT Holdings reiterated Tuesday that it “unanimously” recommends that stockholders vote for the CME merger. “We look forward to the stockholder and member votes on July 9 and to our combination with CME to create the largest, most competitive global derivatives exchange,” CBOT Chairman Charles P. Carey and CBOT CEO Bernard W. Dan said in a letter to its members Tuesday.

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