InterContinental Exchange [ICE] has reached an agreement with the Chicago Board Options Exchange [CBOE] which may help it in its bid to buy the Chicago Board of Trade [CBOT], according to the Wall Street Journal. CBOT members founded the Options Exchange in the 1970s but are now caught in a dispute as to how much ownership they still posses over the CBOE. The case has gone to court, as the CBOE has contemplated a public offering. The agreement would only take hold if ICE successfully buys CBOT, and would pay each of the 1,300 CBOT members in question $500,000 for their stakes in the CBOE. The Chicago Mercantile exchange is currently the front runner to buy CBOT; though more lucrative, CBOT's board said earlier this month that a combination with ICE "would take longer to integrate and would involve significantly greater execution risk" than a Chicago Merc deal.
Sources: Wall Street Journal, Reuters, Financial Times
Commentary: CME Sweetens Offer for CBOT; ICE Considers Its Position • CBOT Favors ICE Over CME, May Stay Independent -- Papers • CBOT Taking ICE Offer Seriously: Money Talks
Stocks/ETFs to watch: IntercontinentalExchange, Inc. (NYSE:ICE), CBOT Holdings, Inc. (BOT), Chicago Mercantile Exchange Holdings Inc. (NASDAQ:CME). Competitors: NYMEX Holdings Inc. (NMX), International Securities Exchange Inc. (ISE)
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