Chicago Mercantile Exchange Holdings Inc. (CME) Tuesday said it will meet with shareholders of CBOT Holdings Inc. and members of the Chicago Board of Trade to reiterate the advantages of its proposed merger with CBOT and provide its views on the unsolicited proposal made by IntercontinentalExchange (ICE) to CBOT shareholders last week (see Daily GPI, March 16).

The meeting will be held at 3:15 p.m. on Thursday at the W Chicago City Center. CME executives, including Executive Chairman Terry Duffy and CEO Craig Donohue, will address ICE's unsolicited proposal and explain CME's views as to why the ICE proposal is inferior to the CME/CBOT merger provided for in the agreement.

CME claims that ICE's estimated synergies "appear significantly exaggerated," and that the ICE proposal poses "significant execution and integration risks" and is "predicated on CBOT shareholders accepting a weaker currency." Further, CBOT's "comparative future growth potential and value creation opportunities would be limited by the deal," CME said.

"We look forward to the opportunity to meet directly with CBOT shareholders and members to discuss the benefits of our deal and our point of view on the weaknesses of the ICE proposal," said Duffy. "Our merger will create a strong company well positioned to compete in the rapidly changing global derivatives market, offering the greatest benefits for the shareholders and customers of both companies."

But "CME's rhetoric will not fool CBOT shareholders," said ICE in a statement Tuesday. "The facts are that the ICE proposal provides more than $1.3 billion,or over $25 per share, in additional current value, making it clearly financially superior," said ICE CEO Jeffrey C. Sprecher. "In addition, an ICE/CBOT combination would give CBOT shareholders a majority stake in a faster growing, better positioned company that will deliver substantial benefits for customers, shareholders and the city of Chicago for many years to come."

On Oct. 17, CME and CBOT signed a definitive agreement to merge the two organizations (see Daily GPI, Oct. 18, 2006).

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