May 30, 2007 9:16 am US/Central
Atlanta Company Sweetens Bid For Board Of Trade
Merc Also Wants To Buy CBOT
ATLANTA (AP) ―
IntercontinentalExchange Inc. on Wednesday confirmed it reached a deal that in effect sweetens the Atlanta energy exchange operator's bid to buy the Chicago Board of Trade.
ICE and Chicago Board Options Exchange said they would pay CBOT members who own CBOE exercise rights $500,000 in cash or securities for each right. The move, which could cost up to $665.5 million, places a value on rights that are at the center of a legal dispute between CBOT and CBOE members over ownership of the options exchange. ICE and CBOE would each foot half the bill.
The offer is contingent on ICE's acquiring CBOT Holdings Inc., the parent company of the Board of Trade. ICE is in a bidding war with Chicago Mercantile Exchange Holdings Inc. to buy the country's oldest futures exchange.
Last week the Chicago Merc, which operates the country's largest futures exchange, boosted its bid 16 percent, gaining approval from the CBOT board, which deemed the offer superior to ICE's even though it was worth less. ICE, an upstart that last year bought the New York Board of Trade, started the war by making an unsolicited bid that was higher than Chicago Merc's initial offer.
CBOE was formed by CBOT members three decades ago, but the two have been in a legal dispute over how much of CBOE is owned by CBOT. The proposed deal would end that legal battle by paying CBOT members holding the exercise rights either cash or equity in CBOE.
CBOE is making the deal because it would allows the options exchange to convert into a holding company. The deal also includes an agreement between ICE and CBOE on technology and product development.
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