Cbot voters may shun CME bid
Pressure is being placed on the Chicago Mercantile Exchange (CME) to raise its bid for the Chicago Board of Trade (Cbot) ahead of a crucial vote by both sets of shareholders on Monday.
Australian fund manager Caledonia (Private) Investments holds a 6.5% stake in CBOT, and said on Thursday that it would vote against the CME’s $9.97 billion offer.
"We think it is a low bid," Caledonia managing director William Vicars told Reuters in an interview. "We are not commenting on whom we agree with. At the moment what the CME has bid isn't attractive to us," Vicars said.
His comments follow the Cbot’s decision earlier this week to reject a revised proposal from Intercontinental Exchange (ICE), deeming it as inferior to the CME bid. The battle for hearts and minds has intensified in the weeks leading up to vote as ICE and CME have sent countless letters and memos to Cbot members urging them to approve their respective offers and reject the competitor.
Cbot shareholders are known to prefer the idea of being bought by their cross town rival, partly because they perceive that deal to hold fewer execution risks and more growth opportunities than ICE’s offer. Yet speculation is growing that they will hold out for a better bid from the CME, making the prospect of the bidding war continuing into August and September increasingly likely, according to sources close to the exchange.
CME is offering 0.35 share for each CBOT Holdings Inc. share in a deal valued Tuesday at $9.97 billion, not including a $9.14-a-share dividend that would be paid from CBOT before closure of the deal.
The value of the hostile offer for the Chicago Board of Trade from the Intercontinental Exchange passed the $12bn mark at one stage during June. Vicars argues that Cbot could command $11.4 billion, citing trading and earnings that are growing faster than the CME's.
There is a concern that Caledonia, along with other smaller opposing shareholders, could use their influence to foil the CME plan. The fund manager of approximately A$3.5 billion ($3 billion) in Australian and global stocks is a known activist shareholder. Last year, it was instrumental in getting the chief executive of the Sydney futures exchange operator, SFE Corp. made head of the company that acquired it, Australian stock exchange operator ASX Ltd. Caledonia still holds stake in ASX.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Exchanges
Asia’s ETF assets on the rise – HKEX presents the results of Asia ETF survey 2019
Asia’s total ETF assets surged by 23.9% in the first half of 2019 thanks to an increasing adoption of ETFs into investment portfolios. According to a survey conducted by Hong Kong Exchanges and Clearing (HKEX), asset expansion in Asia’s ETF market is set…
NYSE Offers Exchange-Calculated Bitcoin Index, with More to Come
NYXBT will initially be based off data from Coinbase Exchange.
Deutsche Börse to set up Europe's first multi-asset RMB platform
German exchange group signs joint venture deal with CFFEX and Shanghai Stock Exchange
Exchange Revenue Figures Rise, Fall; Data Revenues Continue Steady Increase
A mostly positive mix of Q1 results also yield big increases in data revenues for some exchanges.
Lift-off for ASX Aussie dollar swap clearing business
Volumes jump following revamp of Sydney bourse's clearing incentive scheme
Exchange Data Revenues Make Positive Start to 2015
Acquisitions made up for some shortfalls in exchange revenues
CME looks to local banks for FX liquidity in emerging markets
Chicago-based exchange targets China, India and LatAm growth