One of the youngest commodity exchanges, The IntercontinentalExchange (ICE), founded in 2000, reportedly is the front-runner as a merger partner for one of the oldest, the New York Board of Trade (NYBOT), whose origins as a trader of cocoa, coffee and cotton go back more than 100 years.
According to the Financial Times, the ICE offer totals $1 billion and is looked on favorably by the NYBOT board of governors. NYBOT’s equity members still have to weigh in, however, and that process does not appear to be going smoothly. A briefing for the members on merger offers slated for Thursday was put off at the last minute until Friday afternoon.
NYBOT, which started in 1870 as The Cotton Exchange, has previously disclosed it is considering offers from entities in the United States and Europe. It also has said it is working on starting up electronic trading and considering an initial public offering. ICE went public last November and the New York Mercantile Exchange, reportedly another contender for NYBOT, has said it is planning an IPO, but has not set a date.
Analysts point out a deal with NYBOT would benefit ICE, a rapidly growing electronic energy commodity exchange, by providing a clearinghouse, a critical element the New York exchange has and ICE lacks. Currently, ICE trades are cleared through LCH Clearnet in London. Both the company’s futures and OTC businesses have recently been setting records (see Daily GPI, Sept. 6).
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