Proving that while it might be down it is definitely not out of the bidding war to acquire the Chicago Board of Trade (CBOT) following Monday’s Department of Justice (DOJ) ruling, IntercontinentalExchange Inc. (ICE) fired back Tuesday evening with an enhanced merger proposal to CBOT.

In addition, ICE said it intends to file a preliminary proxy statement to oppose the proposed acquisition of CBOT by the Chicago Mercantile Exchange (CME). The Atlanta-based electronic exchange said it also intends to solicit votes against the proposed CBOT/CME combination at the CBOT stockholder meeting scheduled for July 9 after the Securities and Exchange Commission review of its preliminary proxy statement is completed.

ICE’s bid suffered a significant blow Monday when the DOJ’s Antitrust Division closed its investigation into the CME-CBOT merger with a finding that the deal would likely not reduce competition (see Daily GPI, June 13). However, with ICE’s strong move late Tuesday, all eyes will be on the July 9 vote for the response of CBOT members.

Among other things, ICE’s enhanced proposal gives CBOT Holdings stockholders the option of electing to receive cash in lieu of ICE/CBOT shares in an amount equivalent to the value implied by 1.42 ICE shares per CBOT share at the close of the ICE/CBOT merger. The total amount of available cash consideration will be a maximum of $2.5 billion, with individual cash elections subject to proration in the event that the maximum amount of cash available is oversubscribed.

Based on Tuesday’s closing prices, the ICE offer is valued at $211.55 per CBOT Holdings share. This calculation of value per share does not include the additional consideration offered to CBOT full members related to the treatment of the Chicago Board Options Exchange exercise rights, which ICE calculates to be a minimum of an additional $18.29 per CBOT Holdings share. ICE noted that the revised CME proposal represents only $191.98 per CBOT Holdings share, which means the ICE offer represents a 10.2% premium to the CME proposal and represents over $1 billion of additional value to CBOT shareholders.

“This enhanced proposal demonstrates ICE’s continuing commitment to address the needs of CBOT stockholders and members,” said ICE CEO Jeffrey C. Sprecher. “Over the past few weeks, we have had productive discussions with a wide spectrum of stakeholders. Based on this input, we have devised an enhanced proposal that we believe is extremely compelling to stockholders and members. Our proposal also resolves important issues that are not addressed by the CME agreement that CBOT stockholders will have the opportunity to vote against on July 9. We believe that the CME acquisition of CBOT is not in the best interest of CBOT stockholders. By filing our preliminary proxy materials, we are signaling our intent to actively assist CBOT stockholders and members to oppose the inferior CBOT/CME combination so that CBOT stockholders can send a clear message to their board that they want proper consideration given to the clearly superior ICE proposal.”

With its intention to file a preliminary proxy statement to assist CBOT stockholders and members in opposing the proposed acquisition by CME, ICE noted that a vote “against” the proposed CME merger preserves the opportunity of CBOT’s stockholders to receive the significant premium for their shares contemplated by ICE’s proposal which, if consummated, provides “significantly greater financial value” than the proposed CME merger. ICE added that a vote against the proposed CME merger also preserves the heritage of CBOT, while sending a strong message to CBOT’s board that CBOT stockholders want the opportunity to accept the ICE proposal.

ICE sent a letter Tuesday afternoon to the CBOT board of directors outlining its enhanced bid. More information on ICE’s resubmitted proposal, including the company’s integration strategy, can be found at, a website set up by ICE to highlight its merger proposal.

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