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CBOT + CME = No Longer BFF?

By Shannon in Miscellaneous on Mar 24, 2007 6:00PM

Chicagoist doesn't usually dabble in business news. Normally, we find talk of mergers and acquisitions a suitable substitute for Ambien. But we've found ourselves all wrapped up in the hoopla surrounding the Chicago Mercantile Exchange's buyout of the Chicago Board of Trade. After an October announcement of intent, the directors of the CBOT scheduled an April 4 meeting to vote on CME's $8.6 billion bid. Presuming it was a done deal, the CME was all set to rock back on its collective haunches and merge slow and steady into the CBOT's love nest.

chicago board of tradeNot so fast, said out-of-towners Intercontinental Exchange Inc. Last week, the Atlanta-based firm (which only dates back to 2000, as opposed to the two century-old Chicago trading firms) made an unsolicited offer that, so far, CBOT hasn't refused: a monetary uppage of CME's bid to the tune of $9.6 billion. Where such a relatively new upstart got the dough to best the Merc by a billion freaking dollars we have no idea. We do know that things just got a whole lot more interesting as a result. Due to the interloper, the CBOT has postponed the crucial April 4 meeting indefinitely while they review ICE's offer.

CME's now on the defensive, trying to punch up the benefits of a CBOT/CME merger without actually raising their bid. We're hometown buddies, the CEOs cajoled on Thursday. Surely the CBOT would rather go with a local sweetheart instead of some cocky greenhorn, they reasoned. Some mud has even been slung between CME and ICE; CME called their rival's offer "inferior" despite the extra moolah, while ICE scoffed that "CME's rhetoric will not fool CBOT shareholders." Below the belt. We like it. To top it all off, the U.S. Futures Exchange started offering a contract based on whoever wins out. Seriously, those guys will bet on anything, even the fate of one of their own partners in crime.

Image coutesy of McBLG97.