As the CBOT Holdings weighs rival bids for the Chicago Board of Trade, it is unclear whether the pot could grow sweeter.
In separate interviews Friday, the heads of rival exchanges competing for CBOT Holding's Chicago Board of Trade faced off on CNBC, describing why each felt they were making the best offer for the CBOT and expected to prevail in the bidding.
The remarks come as the Chicago Mercantile Exchange met with members and shareholders of the CBOT holdings on Friday.
The CME has offered about $8 billion for the crosstown CBOT. However, the CBOT has postponed a shareholder vote on the deal in order to have time to weigh an unsolicited rival bid from Intercontinental Exchange, an an electronic futures market known as ICE, which is offering about $9.9 billion.
“We have a definitive merger agreement with the Chicago Board of Trade,” CME’s Donohue told CNBC. “The Board of Trade’s directors continues to recommend our merger to the shareholders of CBOT.”
The Battle For the Board
Donohue said he is “confident” of completing the planned merger by the middle of the year without haven to make "any concessions" to complete the deal.
The CME-CBOT combination is “far superior strategically, financially and operationally to the ICE proposal,” Donohue said. “I think (CBOT) will agree with us that it’s an inferior proposal."
However, ICE Chief Executive Jeffrey Sprecher said his company's offer is superior both in terms of its value and in its prospects for future growth.
“It’s not a consolidation play with ICE,” he said Friday. “This is a growth story. We’re going to take it into the over-the-counter bonds business, the spot gold business. We want to bring new opportunities. That allows traders new opportunities to trade.”
Sprecher said ICE recently acquired the New York Board of Trade and is “putting money and technology in it” to increase the company’s clearing capacity. He said ICE recently acquired the Continental Power Exchange and the International Petroleum Exchange and knows how to fold different companies into a coherent whole.
“I’m feeling more optimistic,” Sprecher said.
When asked if ICE would up the ante if CME increased its bid, Sprecher said, “We’ve asked the CBOT directors for an opportunity to go in and do more due diligence, look at the books and records, and see if we can find even additional opportunities that would provide value to both our shareholders and the board of trade shareholders. In other words, have a higher bid.”