The Chicago Mercantile Exchange (CME) has increased its bid for the Chicago Board of Trade (CBOT), as it faces a rival takeover attempt from the Intercontinental Exchange (Ice).The CME said on Friday that it will now exchange CBOT shares for 0.35 CME shares each, up 16% from its previous offer of 0.3006. It has also committed to buy back up to $3.5 billion of the merged company's stock at a price of $560 - the original offer included the option for CBOT shareholders to take cash instead of CME shares, up to a total of $3 billion. Lehman Brothers will finance $2.5 billion of the buyback, the exchange said.
The board of CBOT, in return, has reaffirmed its approval of the CME bid and told shareholders that the Ice bid was "not superior to the revised CME transaction". Ice announced its unsolicited bid in March; it said on Friday that it would "evaluate its options". Ice said it would exchange 1.42 Ice shares for each CBOT share.
At current prices, the two bids are similar - Ice's bid equates to shares worth $187.34 for each CBOT share, while CME is offering shares worth $188.85. CME's earlier bid worked out at $162.19 per CBOT share. But with the buyback price set at $560, CBOT shareholders who made the exchange and then participated in the buyback could theoretically net $196 per CBOT share.
CBOT is trading at $202.12 per share on the New York Stock Exchange.
More on Exchanges
Chicago-based exchange targets China, India and LatAm growth
Stock exchange group has “excess cash”, says group CEO
Increased volatility will spur demand for risk management tools in Asia
Onshore derivative market is the focus for Osaka Securities Exchange
Sign up for Risk.net email alerts
Sponsored video: MarketAxess
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.