Chicago Mercantile Exchange Holdings Inc. and CBOT Holdings, Inc. announced that they have sweetened the terms of their merger agreement once again.
The firms have agreed to increase the consideration CBOT shareholders will receive in the merger by increasing the exchange ratio from 0.350 to 0.375 shares of CME Holdings common stock for each share of CBOT Holdings common stock. The revised agreement has been approved by the boards of directors of both companies.
Additionally, Caledonia Investments PYT. Ltd, CBOT’s largest shareholder, has announced that it will endorse the revised merger agreement and fully support the strategic combination of CME and CBOT.
Following completion of the transaction, current CBOT shareholders will own approximately 36% of the outstanding shares of the combined company, up from approximately 35% in the existing agreement. All other terms of the existing merger agreement between the two companies remain the same, including the pre-close special dividend by CBOT Holdings to its shareholders of US$9.14 per share, the post-close tender offer for up to US$3.5 billion of shares of the combined company (or about 11.4%) at a fixed price of US$560 per share and the terms of CME’s purchase offer and minimum guarantee regarding the Chicago Board Options Exchange exercise rights.
CME also stated that the enhanced merger consideration constitutes a “best and final” offer. The special meetings of shareholders of CME Holdings and CBOT Holdings to approve the transaction and of members of CBOT to approve related matters are scheduled for July 9.
“This enhancement to the terms of our merger agreement reflects our commitment to joining forces with the CBOT and our conviction that no combination can match the benefits we will create for all shareholders, members and customers,” said CME executive chairman Terry Duffy, in a release. “The merger of CME and CBOT will create significant cost savings, preserve important core member trading rights, and generate exciting new growth opportunities. As the largest and most diverse exchange, the combined company will be a strong global competitor, and we look forward to aggressively pursuing our growth strategy.”
CME sweetens CBOT bid
- By: James Langton
- July 6, 2007 July 6, 2007
- 08:25