U.S. News

CBOT Shareholders Approve Acquisition by CME


Shareholders of CBOT Holdings have approved the company's purchase by Chicago Mercantile Exchange Holdings, CME's executive chairman Terry Duffy said Monday after U.S. markets closed.

At a special shareholder meeting, Duffy cited preliminary results of a separate CBOT member and shareholder vote that ended Monday.

"Today has been a long time in coming," Duffy said. The $11.9 billion merger will put the two largest U.S. futures exchange together under one roof.

Most analysts predicted victory for Chicago Mercantile Exchange Holdings after the company improved its bid for a third time on Friday in an 11th hour move to quell dissent among CBOT Holdings shareholders.

A vote that looked like it might be a toss-up, given a higher competing bid for CBOT from IntercontinentalExchange , showed a landslide victory for CME.

CME's Chief Executive Craig Donohue said Friday that he was "very, very confident" the purchase of CBOT, which was first announced in mid-October, would be approved.

Caledonia Investments, the largest owner of CBOT shares, dropped its opposition to the deal after terms were approved.

Ray Cahnman, a former CBOT board member and owner of four CBOT memberships, said Caledonia's decision to vote for the deal had a huge influence on other CBOT members.

Cahnman previously opposed the CME-CBOT deal, but said he would vote for it. "Caledonia are very shrewd and very experienced," he noted.

CBOT members and shareholders and CME members had been voting for a week.

At Friday's closing prices CME's bid was worth about $11.9 billion, including a one-time special dividend by CBOT payable upon the deal closing. ICE's bid valued CBOT at about $11.8 billion.

CME's raised offer calls for the exchange of 0.375 shares of the company's common stock, up from 0.35 in the earlier agreement, for each CBOT share. CBOT shareholders now hold about 36 percent on the combined company.