Responding to word earlier this month that Chicago Mercantile Exchange Holdings Inc. (CME) and CBOT Holdings, parent of the Chicago Board of Trade (CBOT), have revised the terms of their definitive merger agreement, Atlanta-based IntercontinentalExchange Inc. (ICE) has announced that it will invite members of (CBOT) to a meeting to discuss the benefits that an ICE/CBOT combination would deliver to shareholders, members, customers and employees.
ICE CEO Jeffrey Sprecher, along with other members of ICE’s senior management team, will meet with CBOT members Thursday to discuss details of what the electronic exchange calls “the superior ICE proposal.” Going on the offensive, ICE has set up a website at www.theicecbot.com that outlines the benefits of the company’s proposal for CBOT.
“We are extremely pleased to be hosting this event in response to the overwhelming number of requests we have received from CBOT members for a face-to-face meeting,” Sprecher said. “We believe it will provide a useful forum to outline in greater detail the strategic and financial merits of an ICE/CBOT combination and to address member questions directly.”
Based on the May 23 closing share prices, the ICE proposal is valued at $210.83 per CBOT share, over 16% or approximately $1.5 billion above the CME proposal, which is valued at $181.79 per CBOT share.
“We look forward to a constructive dialogue with the CBOT membership regarding our proposal, which would result in greater immediate and long-term value creation, as well as superior growth prospects for shareholders, members, customers and employees than the alternative transaction that the CBOT has agreed to with the Chicago Mercantile Exchange,” Sprecher said. “We have more confidence than ever that ICE’s growth trajectory, superior currency, demonstrated ability to integrate new businesses, innovation track record, and trading platform capabilities, when combined with the CBOT, would create a highly compelling business combination.”
Earlier this month, CBOT Holding’s board of directors and its special transaction committee unanimously reaffirmed their recommendation that CBOT Holdings shareholders vote in favor of the merger agreement with CME and also concluded that the unsolicited proposal submitted by ICE was “not superior” to the revised CME transaction (see Daily GPI, May 14).
CME first publicly approached CBOT with its $8 billion offer in October (see Daily GPI, Oct. 18, 2006). In March, ICE proposed a $9.9 billion stock-for-stock transaction for CBOT (see Daily GPI, March 16; March 23). CME’s revised bid Friday was valued at $9.2 billion.
CBOT’s board of directors has established May 29 as the record date for the July 9 special meeting of stockholders to vote on the proposed merger with CME. Only holders of record of CBOT Holdings Class A common stock as of the close of business on May 29 will be entitled to notice of, and to vote at, the July 9 special meeting.
The CBOT member meeting with ICE will be held in Chicago at 3:30 p.m. CDT on May 31. Only CBOT members who respond in advance to an invitation will be admitted to the event. CBOT members should dial (800) 562-1675 to register. Other interested parties are invited to listen via conference call by dialing as follows: domestic participants, (888) 792-8398; international participants, (973) 582-2773. The passcode is 8847664. A live audio webcast of the meeting also will be available on ICE’s website at www.theice.com under “About ICE/Investor Relations” and at www.theicecbot.com.
A replay will be available at (877) 519-4471 for callers within the United States and at (973) 341-3080 for callers outside of the United States. The replay passcode is also 8847664.
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