Chicago Mercantile Exchange Holdings Inc. (NYSE, Nasdaq: CME) and Chicago Board of Trade owner CBOT Holdings, Inc. (NYSE: BOT) announced a revised merger agreement on Friday, with CME increasing its offer by 16 percent.
Under terms of the revised agreement, CBOT Holdings shareholders will now receive 0.3500 shares of CME holdings Class A common stock for each share of CBOT Holdings Class A common stock.
The CBOT Holdingâ€™s Board of Directors â€œunanimouslyâ€ reaffirmed its recommendation that the companyâ€™s shareholders vote in favor of the CME deal, CME said in a released statement.
In addition, the CBOT board concluded that unsolicited bid by InterncontinentalExchange, Inc. (ICE) was â€œnot superiorâ€ to the revised CME offer. The new CME proposal offered â€œgreater overall benefitsâ€ for shareholders and members, said CBOT Chairman Charlie Carey.
CME also said it would make a cash tender offer for up to $3.5 billion in common stock of the combined company, or approximately 12 percent of the combined companyâ€™s outstanding shares, at a fixed price of $560 per share, shortly after the closing of the merger.
The tender offer is in lieu of the cash election feature that was part of the original merger agreement.
We believe there is strong support for the combination from shareholders and members of both companies, and these revised terms and the cash tender offer makes our already compelling transaction even more attractive, said CME executive chairman Terry Duffy.