A bitterly contested battle for the Chicago Board of Trade (CBOT) headed for the final stretch this weekend as a vote loomed tomorrow on plans for the fast-growing futures market.
CBOT Holdings shareholders will vote on a friendly merger offer from its crosstown rival, the Chicago Mercantile Exchange (CME), to create the world's biggest financial exchange by market capitalization.
But a fierce campaign for CBOT is also being waged by IntercontinentalExchange (ICE), which operates exchanges around the world. The parties have been in a heated dispute over which offer is superior.
On Friday, CME sweetened its offer for a third time, allowing CBOT shareholders to own some 36 percent of the combined company, up from 35 percent in the prior agreement.
Michael Vinciquerra, analyst at BMO Nesbitt Burns, said the latest CME offer based on current share prices was now worth US$11 billion, up from US$10.3 billion, giving the Chicago rival a likely edge.
CME management "apparently felt the risk of a `no' vote next Monday [tomorrow] was too great, given commentary from some large CBOT shareholders," the analyst said. "We expect this revised offer will be approved by CBOT shareholders."
CBOT chairman Charles Carey on Friday urged his shareholders to accept the CME offer in tomorrow's shareholder vote.
"The merger of CME and CBOT is more compelling than ever," he said. "The combination of CME and CBOT will create a global derivatives exchange that is unparalleled in scope, size and functionality, while the increase in the exchange ratio will provide our shareholders with significantly greater overall value."
The CME, the largest futures contract market in the US, announced in October its deal with CBOT before facing a competing cash-and-stock bid by the Atlanta, Georgia-based ICE, which controls the New York Board of Trade and the London-based International Petroleum Exchange.
ICE said on Tuesday that its offer was "a superior transaction that has not been matched by CME," and urged CBOT shareholders to reject the CME offer at tomorrow's meeting.