CME urges CBOT members to vote in favor of merger

NEW YORK (Reuters) - Chicago Mercantile Exchange Holdings Inc. (NYSE:CME - News) on Friday urged shareholders and members of the Chicago Board of Trade to vote in favor of CME's offer to take over CBOT, the No. 2 U.S. futures exchange.
The pitch is the latest development in an ongoing battle between CME and upstart energy exchange IntercontinentalExchange Inc. (NYSE:ICE - News) for control of Chicago Board of Trade parent CBOT Holdings Inc. (NYSE:BOT - News).

ICE has been pursuing a hostile bid for CBOT since March. On Thursday, it sent a letter to CBOT members and shareholders urging them to vote against the CME-CBOT merger.

CME issued its response in the form of a letter on Friday, saying that a CME-CBOT merger would add significantly more value than the ICE offer, as well as immediate growth prospects with the lowest risk.

The exchange also said the merged entity would trade more than 10 million contracts a day, making it the world's largest derivatives exchange. The merger would create an entity with a market capitalization of about $30 billion.

On July 9, CBOT shareholders will decide whether to accept CME's bid, worth roughly $10.2 billion based on current share values and about $1.3 billion lower than ICE's bid.

CME said its takeover would provide many benefits to member shareholders, including costs savings for member firms and large direct-access customers of at least $70 million annually from trading floor and trading platform consolidation, CME said.

CME recently upped its bid for CBOT, following a sweetened bid from ICE.

ICE's sweetened offer came after the U.S. Department of Justice gave CME and CBOT the go-ahead for the merger.

Separately, ICE said on Friday it is acquiring the Winnipeg Commodity Exchange, Canada's commodity derivatives exchange.