Another Buyer For CBOT Emerges

An upstart energy exchange located in Atlanta has upped the ante for the acquisition of the Chicago Board of Trade (CBOT). A day after officials from CBOT and the Chicago Mercantile Exchange (CME) had expressed confidence their deal would close by early summer, the Intercontinental Exchange (ICE) offered to pay nearly a billion more for CBOT than the CME’s bid.

The ICE offers values CBOT stock at $187.34 per share, compared to the $169.53 the CME would pay based on March 14’s settlement price on the New York Stock Exchange. That makes the ICE offer worth $9.9 billion. Wall Street apparently saw this as a credible offer because CBOT stock jumped 12% the morning of March 15.

The proposed CME/CBOT merger is currently being studied by the U.S. Dept. of Justice for possible antitrust violations because more than 85% of U.S. futures business would then go through one exchange. There would be no such concerns with an ICE/CBOT merger. ICE officials say the combined company would be based in Chicago. CBOT members are scheduled to vote the CME offer April 4.

Editor’s note: Richard Brock, The Corn And Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.