FROM THE EXCHANGES
By Journal of Indexes Staff

Them's Fighting Words

As this issue went to press, the Chicago Mercantile Exchange (CME) and the IntercontinentalExchange (ICE) were deep in battle over the rights to buy the Chicago Board of Trade (CBOT).

The CME had been courting the CBOT for some time and, in fact, already had agreed to a merger deal with a planned closing in March. All that remained was for CBOT shareholders to vote on the deal, a move largely seen as a technicality. But ICE had different ideas, and submitted an unsolicited counterbid on March 15 that knocked the CME on its heels. The ICE bid came in at $9.9 billion, far over the $8.8 billion offered by the CME. It effectively ground the two-Chicago exchanges merger process to a halt.

Many expected the CME to increase its offer in response to ICE's efforts, but the CME has stood firm, arguing that ICE is too optimistic in its merger projections and that they don't have the scope to take on a group as large as the CBOT. The CBOT's board will review both proposals.