Glitch! It’s not just the NYSE anymore. Electronic trading of financial and agricultural derivatives at the Chicago Board of Trade has ground to a halt. They’re blaming “a technical glitch.” It’s all open outcry now.
In case you missed the Crameruption on Friday:
Cramer’s main points:
-The Bear guys should shut their dirty, whorish mouths
-Bernanke should get on a Bear Stearns call and stop being an “academic”
-But, Bernanke has “NO IDEA!”
-People talk to Jim Cramer, especially in the last 72 hours
-It’s bad out there, contrary to the Jim Cramer of 3 weeks ago, who was saying CDO holders would be made whole and calling for buys in the financial sector
-The Fed is asleep!
-Jim Cramer worked in fixed income at Goldman Sachs, which is like having a pair of scissors made out of paper-covered rocks and trumps any other form of argument or rational thought
-Jim Cramer knows too many people and is too darn old
-So old, that he knows of a President named Hoover
With a shareholder vote on Monday, the Chicago Mercantile Exchange increased its bid for the Chicago Board of Trade again today, all but securing a deal set to create the largest derivatives exchange in the world.
The new Merc bid is valued at $11.3bn, still short of the rival $11.4bn offer from the Atlanta based IntercontinentalExchange, but enough to win the support of Caledonia Investments, a major CBOT shareholder that previously resisted the Merc’s advances. The CBOT board has favored the cross-town merger since talks began last October and both CBOT and CME believe enough shareholder support now exists to push the deal through.
Unable to take a hint, ICE sent a letter to top CBOT officials on Tuesday saying it would consider sweetening its bid, the Wall Street Journal reports. Nonetheless, expect a new Chicago superexchange to come into being on Monday.
CME Sweetens CBOT Bid Ahead of Next Week’s Vote [Wall Street Journal]
How much is the Chicago Board of Trade really worth? The Chicago Mercantile Exchange upped its offer for the world’s oldest futures and options exchange, this time raising its bid by 14% to $11.7bn. This comes only days after the Merc offered a $485mn dividend to CBOT shareholders.
The rival bidder, Intercontinental Exchange still has an $11.8bn offer on the table and last week filed a preliminary proxy statement to stop a CBOT-Merc merger. Art-Deco façade included, CBOT has a market value of $10.9bn.
Howard Simons, president of Illinois-based Rosewood Trading Inc. said, `Whoever winds up buying the Board of Trade is going to have a moment of buyer’s remorse because it’s almost like they are forcing each other into overpaying.”
CME, Intercontinental Exchange May Sweeten CBOT Bids [Bloomberg]
[This post was written by CBOT Overlord Peter T-1000 Ribic]
IntercontinentalExchange Inc. issued a preliminary proxy statement to the SEC yesterday urging Chicago Board of Trade shareholders to vote against a rival bid from the Chicago Mercantile Exchange. It is unlikely this will be enough to stop the CBOT-CME merger.
This week Merc sweetened its bid with a $482mm special dividend to CBOT shareholders and received Justice Dept. approval. According to CBOT President and CEO Bernard Dan, “From a strategic and operational perspective, the combination with CME provides outstanding opportunities for growth, efficiencies and innovation, creating the leading global derivatives exchange in all major asset classes and one of the world’s most liquid marketplaces.”
The ICE proxy statement, which may be sent to CBOT shareholders as early as next week, emphasizes that its bid for CBOT remains about $1bn higher than the CME offer, saying:
The implied value of the ICE Proposal has remained at a consistent, meaningful premium to the implied value of the original CME proposal and the revised, increased CME proposal. Since March 15, 2007, the implied value of the ICE Proposal has always exceeded the value of the Proposed CME Merger.
CME, CBOT Revise Merger Agreement to Provide Increased Value [Chicago Board of Trade]
ICE steps up CBOT battle [Chicago Tribune]
InterContinentalExchange Proxy Statement [SEC]