IntercontinentalExchange submits new proposal in bid for Chicago Board of Trade

By Lisa Kerner

Charlotte, N.C., June 12 - IntercontinentalExchange, Inc. submitted an enhanced merger proposal to the Chicago Board of Trade and said it also intends to file a preliminary proxy statement opposing the proposed acquisition of CBOT Holdings, Inc. by the Chicago Mercantile Exchange.

IntercontinentalExchange plans to solicit votes against the proposed CBOT/ Chicago Mercantile Exchange combination at the CBOT Holdings stockholder meeting on July 9, according to a company news release.

Under the revised proposal, CBOT Holdings stockholders can elect to receive cash in lieu of ICE/CBOT shares equal to 1.42 ICE shares for a total cash consideration of up to $2.5 billion. In addition, CBOT Holdings will be permitted to pay pre-closing dividends of $0.29 per share for the third and fourth quarters of 2007 and a dividend for the first quarter of 2008 based on earnings during that period.

The ICE offer is valued at some $211.55 per CBOT Holdings share, while the revised Chicago Mercantile Exchange proposal represents $191.98 per CBOT Holdings share.

"This enhanced proposal demonstrates ICE's continuing commitment to address the needs of CBOT stockholders and members," ICE chairman and chief executive officer Jeffrey C. Sprecher said in the release.

"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."

Sprecher believes the Chicago Mercantile Exchange acquisition of CBOT Holdings 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," Sprecher added.

On Monday, the U.S. Department of Justice cleared the way for completion of the merger of Chicago Mercantile Exchange Holdings and CBOT Holdings.

Under the companies' amended Oct. 17, 2006 merger agreement, CBOT Holdings shareholders will receive 0.35 of a share of Chicago Mercantile Exchange class A common stock for each share of CBOT Holdings class A common stock, a 16% increase from the original deal.

The agreement also gives CBOT Holdings shareholders a 34.6% stake in the combined company, up from 31.2%, according to a company news release.

CBOT Holdings operates the Chicago Board of Trade, a Chicago derivatives trading exchange, and the Chicago Mercantile Exchange is the first publicly traded U.S. financial exchange.

IntercontinentalExchange is an Atlanta-based electronic energy marketplace.

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