CBOT Holdings Inc., the parent of the Chicago Board of Trade, has ended its silence that it was maintaining since last week saying its board had authorized talks with InterContinental Exchange, the Atlanta-based company that made a surprise bid for the company last week. The upstart electronic commodities-trading-platform operator ICE had stated that it had entered an unsolicited bid to merge with CBOT. The deal valued at nearly $10 billion.
Intercontinental has improved on an $8.9 billion bid from Chicago Mercantile Exchange Holdings. The deal would combine the city’s two biggest exchanges and intercontinental would keep ownership of the Board of Trade in Chicago. Moreover, the surprise bid had apparently confronted the agreed combination of the CBOT with the Chicago Mercantile Exchange announced in October. The announcement was taken by surprise as it stirred an industry which had just settled following the staining takeover struggle for Euronext and the London Stock Exchange.
According to the official statement, the agreement for CBOT to sell to Chicago Mercantile Exchange Holdings Inc. in a cash and stock transaction was valued at $8.37 billion remains in effect. Intercontinental at present manages and operates the leading European electronic energy future markets that process around half the volume of the global crude oil futures deals. The company had recently acquired the New York Board of Trade in January for 1.8 billion dollars, where agricultural and financial products are operated.
However, a major concern revolves around politicians and local supporters, who want ownership to stay in local hands to keep the two exchanges from further takeover endeavor. Politically the issue is very important as these two boards and related firms employ more than 150,000 people in Illinois.
