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CME to Defend Bid in Meeting With CBOT; ICE Fires Back

Chicago Mercantile Holdingsset plans to defend the terms of its takeover proposal for CBOT Holdingsfollowing a competitive bid from IntercontinentalExchange, prompting ICE to take a shot at its rival's offer later Tuesday.

CME will meet with shareholders and members of CBOT , the number two U.S. futures exchange, on Thursday at 4:15 pm New York time at a Chicago hotel.

CME's top executives "will address ICE's unsolicited proposal and explain CME's views as to why the ICE proposal is inferior to the CME/CBOT merger provided for in the agreement between the parties."

"We look forward to the opportunity to meet directly with CBOT shareholders and members to discuss the benefits of our deal and our point of view on the weaknesses of the ICE proposal," said CME chairman Terry Duffy.

Atlanta-based ICE, which trades energy and soft commodity derivatives, last week made an unsolicited, $9.9 billion bid for CBOT. That proposal trumped the terms of the CME's current offer, announced in October, by about $1 billion.

In its first extensive comments since the ICE proposal was revealed on Thursday, CME said the energy exchange's estimated synergies with CBOT "appear significantly exaggerated" and that a deal with ICE would limit CBOT's comparative future growth potential.

ICE responded by touting its own proposal over CME's bid.

"CME's rhetoric will not fool CBOT shareholders," Jeffrey Sprecher, ICE chief executive, said in a statement. "The ICE proposal provides more than $1.3 billion, or over $25 per share, in additional current value, making it clearly financially superior."

The CME-CBOT merger is undergoing a review by the U.S. Department of Justice and is also subject to approval by the shareholders of both companies.

CBOT shareholders are slated to vote on the CME's proposal on April 4, although a group of investors in Louisiana has sued to block that vote.