Proving that it plans to stay in the fight to the end to acquire the Chicago Board of Trade (CBOT), IntercontinentalExchange (ICE) once again Thursday urged CBOT stockholders and members to reject the proposed sale to the Chicago Mercantile Exchange (CME) by voting “no” on July 9.
In a letter to CBOT stockholders and members Thursday, ICE urged: “Don’t sell CBOT short,” adding that if CBOT collectively votes for the CME deal it will effectively be leaving $1.3 billion on the table. “Your board of directors has agreed to a bargain basement sale of your company to the Chicago Mercantile Exchange in a transaction that would leave over $1 billion of your money on the table,” said ICE CEO Jeffrey C. Sprecher. “ICE’s merger proposal is clearly superior, both financially and strategically, yet your board has failed to act in your best interests and continues to recommend the inferior CME transaction.”
Through each revised offer from CME and ICE — and there have been a bunch, CBOT’s board has firmly backed CME’s play. In mid-June, CBOT’s board unanimously reaffirmed its recommendation that CBOT Holdings shareholders vote in favor of the revised merger agreement with CME on July 9 (see Daily GPI, June 15).
Sprecher added that based on June 20 prices, the value of the ICE offer is $11.9 billion versus $10.6 billion for the CME offer. “This is a difference of $1.3 billion, or $25.00 per share.” He reminded CBOT’s rank and file that there is still time to change their minds even if they had already returned a proxy, noting that only the latest dated vote will count.
In addition, the ICE executive said his company has reached an agreement with CBOE that can lead to the resolution of the CBOE Exercise Rights issue. “If the necessary approvals are received, each full member will receive at least $500,000 with the ability to elect to receive stock in the CBOE post demutualization — CME has guaranteed only $250,000 and continued litigation,” he said.
Sprecher also labeled CBOT management’s suggestion that ICE will not be able to integrate the technology and clearing platforms as “scare tactics,” adding that ICE has a high-quality clearing infrastructure that the company is quickly scaling.
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