IntercontinentalExchange Inc. on Thursday made an unsolicited $9.9 billion all-stock bid for commodities exchange CBOT Holdings Inc., which has already agreed to an $8 billion takeover by Chicago Mercantile Exchange Holdings Inc.
ICE said the combined global futures and over-the-counter derivatives marketplace would be headquartered in Chicago.
Under terms of the deal, ICE would issue 1.42 shares for each CBOT Class A common share.
That would be worth $187.34 each based on ICE’s Wednesday’s closing stock price. This represents nearly a 13 percent premium to CBOT’s current share price, and a 39 percent premium to its stock price on Oct. 16, 2006, the day before CBOT announced its merger agreement with the Chicago Merc.
The $187.34 per share value also represents nearly an 11 percent premium to the current value of the pending CME/CBOT transaction. CBOT shareholders are scheduled to vote on the CME deal April 4.
CME has gone far beyond its trademark livestock contracts to become a leading derivatives exchange, while CBOT is the main U.S. bond market. The Department of Justice is reviewing that proposed deal.
ICE operates an electronic energy marketplace and owns London’s International Petroleum Exchange where Brent crude contracts are traded. It acquired the New York Board of Trade earlier this year.
ICE said CBOT shareholders would own about 51.5 percent of the combined company, and promises to commit to the same terms as the CME offer regarding CBOT’s open auction markets. ICE also said it will expand CBOT’s metals complex.
ICE said it believes a merger between the two companies could be completed quickly, since it doesn’t see significant antitrust or other regulatory risks, and forecast that such a deal would add to cash earnings per share within 18 months of closing.
Morgan Stanley is serving as financial adviser to ICE, and Sullivan and Cromwell LLP is serving as legal adviser.