Following completion of the transaction, current CBOT shareholders will own approximately 36 percent of the outstanding shares of the combined company, up from approximately 35 percent 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 $9.14 per share, the post-close tender offer for up to $3.5 billion of shares of the combined company (or about 11.4 percent) at a fixed price of $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.
In light of this announcement, CME and CBOT urge shareholders and members to recognize the compelling immediate value and long-term benefits of the CME/CBOT merger. In that regard, the companies continue to expect the merger to be accretive to earnings of the combined company on a cash basis within 12 to 18 months and including the tender offer on a GAAP basis within 18 to 24 months.
“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. “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.”
”The merger of CME and CBOT is more compelling than ever,” said CBOT Chairman Charles P. Carey. “The combination of CME and CBOT will create a global derivatives exchange that is unparalleled in scope, size and functionality, while the increase in the exchange ratio will provide our shareholders with significantly greater overall value. A combination of CME and CBOT will allow us to better compete in a rapidly changing global environment and will provide significant benefits to our shareholders, members, and customers. I urge our shareholders and members to vote for the merger at our special meeting on July 9.”
“This enhanced offer further demonstrates our commitment to CBOT and this merger, and our excitement about the opportunities we will enjoy as a combined company,” said CME Chief Executive Officer Craig Donohue. “We remain focused on financial discipline in any transaction we pursue, and our board has made it clear that this is our best and final offer for CBOT. We are pleased to have the support of CBOT’s largest investor, and we have great confidence in the substantial value this combination can create.”
“The combination with CME will create the most competitive global futures exchange, creating tremendous opportunities for growth, efficiencies and innovation,” said CBOT President and Chief Executive Officer Bernard W. Dan. “The combined company will be the leading global derivatives exchange in all major asset classes and one of the world’s most liquid marketplaces. Thanks to detailed integration planning and the hard work of our staffs over the last eight plus months, we are well positioned to capitalize on these opportunities beginning on Day One.”
