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CBOT Delays Shareholder Vote on CME Merger

The battle for control of the second-largest U.S. futures exchange took its latest twist Tuesday as CBOT Holdings postponed a shareholder vote on its planned merger with Chicago Mercantile Holdings.

The delay of the April 4 vote will give the Chicago Board of Trade's parent time to review an unsolicited $9.9 billion offer from IntercontinentalExchange (ICE) made last week.

CBOT said in a statement the Chicago Mercentile Exchange (CME) merger remained in effect. The two announced their deal almost five months ago, and company officials said as recently as Wednesday they were confident it would close by mid-year.

CME quickly reiterated CBOT's confidence in the original agreement -- trumped in dollar terms by Atlanta-based ICE's surprise proposal, which tops CME's offer by about $1 billion.

"We fully expect the CBOT's board, after completing its review, will recognize that the CME/CBOT merger is superior to ICE's unsolicited proposal -- financially, strategically, and operationally," CME said.

That salvo fueled a war of words between the rival bidders over the 159-year-old CBOT, whose shares have hit new highs on the possibility CME will lift its bid to leapfrog ICE's offer.

"CME's rhetoric will not fool CBOT shareholders," ICE Chief Executive Jeffrey Sprecher said earlier after CME called some claims made in ICE's proposal to buy CBOT "exaggerated."

"An ICE-CBOT combination would give CBOT shareholders a majority stake in a faster growing, better positioned company that will deliver substantial benefits for customers, shareholders and the city of Chicago," Sprecher added.

On Tuesday, in its first extensive comments since the ICE proposal, CME said the energy mart's estimated synergies "appear significantly exaggerated" and a deal would limit CBOT's comparative future growth potential.

The proposal poses "significant execution and integration risks" that could affect customers and shareholders, it added.

The CME-CBOT merger is subject to approval by shareholders of both companies and is undergoing a review by the U.S. Department of Justice. ICE has said its deal would create less market concentration and would better withstand DOJ scrutiny.

ICE closed at $129.89, up $1.90, or 1.5%, on the New York Stock Exchange. CBOT ended up $1.19, or 0.6%, at $197.90 and CME closed up $2.20, or 0.4%, at $532.45.

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