Mar 22, 2007 11:13 am US/Central
Merc Blasts Rival Offer For Board Of Trade
IntercontinentalExchange Of Atlanta Also Bid For CBOT
CHICAGO (AP) ―
Executives at Chicago Mercantile Exchange Holdings Inc. continued an all-out offensive Thursday, trumpeting their offer of more than $8 billion to buy crosstown Board of Trade while blasting an unsolicited proposal by another electronic exchange.
"CBOT shareholders are being offered a minnow trying to swallow the whale alternative, fraught with execution risks and overstated synergies," Craig Donahue, chief executive of CME, said on an early morning telephone call with analysts.
The campaign, which was to continue Thursday afternoon during a presentation with CBOT Inc. investors and shareholders, is designed to beat back an all-stock offer made last week by electronic futures market IntercontinentalExchange Inc.
The ICE bid was said to be worth $9.9 billion when it was announced, or more than $1 billion more than the Merc's $8 billion-plus offer, although both totals fluctuate based on daily stock prices.
ICE has accused CME of using rhetoric to scare CBOT shareholders.
Executives at the Atlanta-based exchange, a relative upstart compared with the venerable Chicago exchanges, have said they believe their bid is "clearly financially superior" and stands a better chance of passing muster with regulators than a Merc-CBOT combination, which would control 85 percent of the U.S. market for exchange-traded futures contracts.
Regulators are said to be concerned about the impact of such a behemoth exchange on prices.
CBOT postponed indefinitely its shareholder vote on the CME bid while its board considers ICE's offer.
CBOT shares fell $2.74, or 1.4 percent, to $194.50 in trading Thursday morning on the New York Stock Exchange while CME shares dipped 90 cents to $539.60. ICE shares climbed 35 cents to $130.10.
(© 2007 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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