Chicago Mercantile Exchange Holdings Inc. said it would increase the value of its $10 billion bid for the Chicago Board of Trade by adding a special dividend for owners of CBOT Holdings Inc., the Wall Street Journal reports.
The move, announced this morning, is designed to respond to a similar proposal from IntercontinentalExchange (ICE) Inc., which is pursuing a hostile bid for CBOT, the owner of the country’s oldest futures exchange.
Click here to read GlobalCustodian.com’s story from yesterday about ICE having made an enhanced merger proposal to trump CME’s original offer.
CBOT’s board met to consider the proposal this morning and also reaffirmed its preference for the Chicago Merc purchase over ICE’s counteroffer.
ICE’s primarily share-based bid has been valued higher than the Chicago Merc because the Atlanta energy market operator’s stock price has outperformed the stock of the Chicago financial-futures exchange.
As part of the new proposal, all CBOT shareholders will receive a one-time cash dividend of $9.14 per CBOT share, or a total of $485 million.
The new proposal also offers extra consideration available for each Board of Trade member that also has a right to trade on the Chicago Board Options Exchange. With the dividend included, those CBOT shareholders would get about $500,000.
ICE and the options exchange recently agreed to pay those Board of Trade members about $500,000 each in a move aimed at settling a long fight between the Board of Trade and the options exchange over valuing the rights.