CBOT Full Members Holding CBOE Exercise Rights Would Receive
$500,000 in Value Per Exercise Right ATLANTA, May 30
/PRNewswire-FirstCall/ -- IntercontinentalExchange, Inc. (NYSE:ICE)
and the Chicago Board Options Exchange (CBOE) today announced that
they have entered into an exclusive agreement that, in the context
of a merger of ICE and CBOT Holdings, resolves the issues relating
to the CBOE exercise rights, and in other respects supports the
business objectives of ICE and CBOE. Under the agreement: -- Full
Members of the Chicago Board of Trade holding CBOE exercise rights
would receive $500,000 in value for each right, or up to $665.5
million in the aggregate, to resolve the issues relating to the
exercise rights in a manner that would make clear that following a
merger between ICE and CBOT, Full Members of CBOT holding the
required interests would be compensated for the loss of the
exercise right. -- Consideration would be paid equally by CBOE and
ICE, with holders of exercise rights being entitled to receive cash
and/or debt securities convertible into both stock of the newly
combined ICE/CBOT Holdings and common shares of CBOE after its
demutualization. -- The exclusive agreement between ICE and CBOE is
contingent on the completion of the proposed merger of ICE and CBOT
Holdings. -- ICE and CBOE have entered into an agreement in
principle for a broad commercial partnership, including technology
and product development, and access to the distribution
capabilities of each exchange. Unlike the acquisition of CBOT
proposed by CME Holdings, which provides no value for the exercise
right eligibility of CBOT members, and no certain resolution to
this critical issue, the ICE-CBOE proposal would provide CBOT Full
Members with immediate value for their exercise rights and the
ability to hold equity in CBOE following its planned
demutualization. In addition, ICE and CBOE's agreement in principle
regarding a commercial partnership provides an opportunity to
create ongoing value for ICE stockholders and CBOE members. "This
strategic agreement would resolve existing litigation and
uncertainty for both CBOT and CBOE members, while unlocking
substantial value for CBOT members, many of whom remain CBOT
Holdings stockholders. It also frees CBOE to pursue a
demutualization for the benefit of its members, and importantly,
accelerates ICE's ability to deliver value in options products for
our stockholders and customers," said Jeffrey C. Sprecher, Chairman
and CEO of ICE. William J. Brodsky, CBOE Chairman and Chief
Executive Officer, said, "We are pleased that ICE sought to address
the exercise right issue and we are delighted to participate in a
proposal that provides significant benefits for each organization.
The offer provides CBOT members with substantial value, liquidity,
and for those who choose, equity participation in CBOE. This is a
unique opportunity to provide certainty for both CBOE and CBOT
members, and to remove an obstacle that has impeded progress for
members at both exchanges." "This exclusive agreement with CBOE
affirms ICE's consistently stated intention to provide a
constructive resolution to this long-running dispute. We are
eliminating a costly and potentially open-ended distraction that
would otherwise persist following a completed merger between ICE
and CBOT. We believe this agreement enhances our already superior
proposal to merge with CBOT and underscores ICE's innovation and
leadership," said Sprecher. He added, "ICE stockholders stand to
benefit through an enhanced offer for CBOT as well as a long-term
cooperative relationship with the world's premier options exchange.
The transaction structure -- in which ICE and CBOE jointly share
the cost of resolving the member rights issue -- is a highly
efficient use of capital." Exercise Rights Agreement Under the CBOE
charter, CBOT Full Members holding the required interests possess
an exercise right to become and remain members of CBOE, and to
trade on the CBOE, so long as such members remain CBOT Full
Members. In connection with ICE's proposal to merge with the CBOT,
the agreement between ICE and CBOE makes clear that following the
ICE/CBOT Holdings merger, CBOT Full Members holding the required
interests will no longer be eligible to use the exercise right and
will be compensated for the loss thereof. As part of this
structure, the pending litigation between CBOE and CBOT would be
settled, eliminating a major barrier to CBOE's plan to demutualize
into a holding company structure. The transactions contemplated by
the ICE/CBOE agreement require approval by a majority of CBOE
members and a majority of the voting power of the CBOT Series B-1
and B-2 members, and are conditioned on completion of an ICE/CBOT
Holdings merger. To be eligible to receive the consideration, a
CBOT Full Member would need to possess the required interests to
exercise a CBOE exercise right at a designated record date prior to
the merger. These interests are comprised of the following: (1) a
Series B-1 membership in CBOT, (2) 27,338 shares of Class A stock
of CBOT Holdings, and (3) one CBOE exercise right privilege (ERP).
The financial details of the ICE/CBOE agreement are as follows: --
ICE and CBOE would each provide up to $332.75 million in
consideration (or total consideration of $665.5 million) to fund
payments to CBOT Full Members possessing the required interests to
exercise a CBOE exercise right. -- ICE would provide each CBOT Full
Member possessing the required interests for the exercise of a CBOE
exercise right the choice of (1) a cash payment of $250,000 or (2)
in lieu of cash, a convertible debenture for common stock of the
newly combined ICE/CBOT Holdings, which would be valued at
$250,000. -- Additionally, CBOE would provide each CBOT Full Member
possessing the required interests for the exercise of a CBOE
exercise right the choice of: (1) a cash payment of $250,000 or (2)
in lieu of cash, a convertible debenture with a face value of
$250,000, which will become convertible following any event in
which the memberships of CBOE are converted into stock. The CBOE
debentures would be convertible into 10% of the number of shares of
stock that a regular membership of CBOE not obtained through the
exercise right were converted into in any such transaction.
Commercial Partnership In addition to providing a mechanism for
settling the long-standing CBOE exercise rights dispute, ICE and
CBOE also announced an agreement in principle, subject to signing a
definitive agreement, to collaborate on initiatives including: --
CBOE providing technical assistance to ICE regarding the
engineering and rollout of ICE's new electronic options trading
platform. -- CBOE providing electronic access to ICE's options
products for CBOE's exchange members on its trading floor,
supported through advertising on the CBOE member website and
through member notices. -- ICE and CBOE working together to develop
futures products and related index options products that would be
beneficial to members of both exchanges. Futures products would be
listed on the ICE Futures trading platform and securities options
would be listed on the CBOE trading platform. -- ICE and CBOE
investigating the possibility of making CBOE's regulated futures
products traded on its Chicago Futures Exchange available via ICE's
electronic trading platform, thereby broadening the distribution of
such products to both CBOE and ICE members. Sprecher concluded, "We
have carefully listened to both the CBOT members and ICE
stockholders throughout this process. We are confident that today's
announcement makes our proposal to merge with the CBOT even more
compelling. In addition, our proposed business partnership with
CBOE would benefit ICE stockholders by accelerating ICE's existing
growth prospects and creating an enhanced market position for the
combined ICE/CBOT." ICE: CBOT Member Meeting As previously
announced, ICE will hold a meeting for CBOT members to discuss the
benefits of an ICE/CBOT combination, including today's agreement
between CBOE and ICE. The CBOT member meeting will be held in
Chicago at 3:30 p.m. CDT on Thursday, May 31, 2007. Chicago Board
of Trade Members should dial (800) 562-1675 to register. Other
interested parties are invited to listen via conference call by
dialing as follows: Domestic Participants: (888) 792-8398;
International Participants: (973) 582-2773. The passcode is
8847664. A live audio webcast of the meeting also will be available
on the Company's website at http://www.theice.com/ under About
ICE/Investor Relations and at http://www.theicecbot.com/. The call
will be archived on ICE's website and on
http://www.theicecbot.com/. A replay will be available at (877)
519-4471 for callers within the United States and at (973) 341-3080
for callers outside of the United States. The replay passcode is
8847664. About IntercontinentalExchange IntercontinentalExchange(R)
(NYSE:ICE) operates the leading global, electronic marketplace for
trading both futures and OTC energy contracts and the leading soft
commodity exchange. ICE's markets offer access to a range of
contracts based on crude oil and refined products, natural gas,
power and emissions, as well as agricultural commodities including
cocoa, coffee, cotton, ethanol, orange juice, wood pulp and sugar,
in addition to currency and index futures and options. ICE(R)
conducts its energy futures markets through its U.K. regulated
London-based subsidiary, ICE Futures, Europe's leading energy
exchange. ICE Futures offers liquid markets in the world's leading
oil benchmarks, Brent Crude futures and West Texas Intermediate
(WTI) Crude futures, trading nearly half of the world's global
crude futures by volume of commodity traded. ICE conducts its
agricultural commodity futures and options markets through its U.S.
regulated subsidiary, the New York Board of Trade(R). For more than
a century, the NYBOT(R) has provided global markets for food, fiber
and financial products. ICE was added to the Russell 1000(R) Index
on June 30, 2006. Headquartered in Atlanta, ICE also has offices in
Calgary, Chicago, Houston, London, New York and Singapore. For more
information, please visit http://www.theice.com/ and
http://www.nybot.com/. About CBOE CBOE, the largest U.S. options
marketplace and the creator of listed options, is regulated by the
Securities and Exchange Commission (SEC). For additional
information about the CBOE and its products, access the CBOE
website at: http://www.cboe.com/. Forward-Looking Statements -
Certain statements in this press release may contain
forward-looking information regarding IntercontinentalExchange,
Inc., CBOT Holdings, Inc., and the combined company after the
completion of the possible merger that are intended to be covered
by the safe harbor for "forward-looking statements" provided by the
Private Securities Litigation Reform Act of 1995. These statements
include, but are not limited to, statements about the benefits of
the merger transaction involving ICE and CBOT, including future
strategic and financial benefits, the plans, objectives,
expectations and intentions of ICE following the completion of the
merger, and other statements that are not historical facts. Such
statements are based upon the current beliefs and expectations of
ICE's management and are subject to significant risks and
uncertainties. Actual results may differ materially from those set
forth in the forward-looking statements. The following factors,
among others, could cause actual results to differ materially from
those expressed or implied in such forward-looking statements
regarding the success of the proposed transaction: the failure of
CBOT to accept ICE's proposal and enter into definitive agreements
to effect the transaction, the risk that the revenue opportunities,
cost savings and other anticipated synergies from the merger may
not be fully realized or may take longer to realize than expected;
superior offers by third parties; the ability to obtain
governmental approvals and rulings on or regarding the transaction
on the proposed terms and schedule; the failure of ICE or CBOT
stockholders to approve the merger; the risk that the businesses
will not be integrated successfully; disruption from the merger
making it difficult to maintain relationships with customers,
employees or suppliers; competition and its effect on pricing,
spending and third-party relationships and revenues; social and
political conditions such as war, political unrest or terrorism;
general economic conditions and normal business uncertainty.
Additional risks and factors are identified in ICE's filings with
the Securities and Exchange Commission (the "SEC"), including ICE's
Annual Report on Form 10-K for the year ended December 31, 2006, as
filed with the SEC on February 26, 2007 and ICE's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2007, as filed with
the SEC on May 4, 2007. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
press release. Except for any obligations to disclose material
information under the Federal securities laws, ICE undertakes no
obligation to publicly update any forward-looking statements to
reflect events or circumstances after the date of this press
release. Important Merger Information In connection with the
proposed transaction, and assuming the merger proposal is accepted
by CBOT, ICE intends to file relevant materials with the SEC,
including a proxy statement/prospectus regarding the proposed
transaction. Such documents, however, are not currently available.
INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ALL
SUCH OTHER RELEVANT MATERIALS REGARDING THE PROPOSED TRANSACTION
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain a free copy of the
proxy statement/prospectus, if and when such document becomes
available and related documents filed by ICE or CBOT without
charge, at the SEC's website (http://www.sec.gov/). Copies of the
final proxy statement/ prospectus, if and when such document
becomes available, may be obtained, without charge, from ICE by
directing a request to ICE at 2100 RiverEdge Parkway, Suite 500,
Atlanta, Georgia, 30328, Attention: Investor Relations; or by
emailing a request to . This communication shall not constitute an
offer to sell or the solicitation of an offer to buy the
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended. ICE and its directors, executive officers and other
employees may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. You can find
information about ICE's executive officers and directors in ICE's
Annual Report on Form 10-K, filed with the SEC on February 26, 2007
and in ICE's proxy statement for its 2007 annual meeting of
stockholders, dated March 30, 2007. Additional information about
the interests of potential participants will be included in the
prospectus/proxy statement, if and when it becomes available, and
the other relevant documents filed with the SEC. Filed by
IntercontinentalExchange, Inc. Pursuant to Rule 425 under the
Securities Act of 1933, as amended, and deemed filed pursuant to
Rule 14a-12 under the Securities Exchange Act of 1934, as amended
Subject Company: CBOT Holdings, Inc. (Commission File No. 001-
32650) DATASOURCE: IntercontinentalExchange, Inc. CONTACT:
IntercontinentalExchange: Kelly Loeffler, VP, Investor Relations
and Corporate Communications, +1-770-857-4726, ; Sard Verbinnen
& Co, Jim Barron/Kara Findlay, +1-212-687-8080, Brad Wilks,
+1-312-895-4700; Crystal Clear Communications, Ellen G. Resnick,
+1-773-929-9292, or cell - +1-312-399-9295, ; CBOE: Carol Kennedy,
VP, Corporate Communications, +1-312-786-7323, Web site:
http://www.theice.com/ http://www.theicecbot.com/
http://www.nybot.com/ http://www.cboe.com/ http://www.sec.gov/
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