Chicago Mercantile Exchange Holdings Inc. Distributes Letter to CBOT Shareholders
June 22 2007 - 9:00AM
PR Newswire (US)
CHICAGO, June 22 /PRNewswire-FirstCall/ -- Chicago Mercantile
Exchange Holdings Inc. (NYSE:CMENASDAQ:CME) today sent the
following letter to shareholders and members of the Chicago Board
of Trade (NYSE:BOT): June 22, 2007 THE CBOT/CME MERGER PROVIDES
SIGNIFICANTLY MORE VALUE AND IMMEDIATE GROWTH OPPORTUNITIES WITH
THE LOWEST RISK Dear CBOT Shareholders, In connection with the
Special Meeting on July 9, 2007, you are being asked to cast the
most important vote in the CBOT's 159-year history. We believe the
choice is clear and you should vote FOR the CME/CBOT Merger.
Long-Term Potential: Our merger will create the world's largest and
most valuable exchange, best positioned to compete and thrive in
today's globally competitive environment. * Together, we would
trade more than 10 million contracts a day, compared to only 7.3
million contracts at Eurex and 3.5 million contracts per day at
Euronext.liffe. CME and CBOT together would be largest derivatives
exchange in the world. ICE, which is the number #2 player in energy
markets, only trades 700,000 contracts per day and does not
materially enhance CBOT's position. * CBOT/CME would be a major
player in every major asset class, from interest rates, equities,
foreign exchange, agricultural commodities, energy and metals. * A
combined market capitalization of approximately $30 billion and a
strong balance sheet will position shareholders to benefit from
further consolidation through mergers and acquisitions, joint
ventures, partnerships and transaction processing opportunities.
Growth: Our merger combines the broadest array of successful liquid
benchmark products with the strongest global distribution network,
trading platforms and clearing capabilities in the industry. These
advantages position us to capture immediate and long-term growth
opportunities. * The revenues of our combined company would be the
most diversified of any exchange in the world. * We believe we can
extract more revenue synergies from our complementary products
through cross-selling opportunities, new product development and
functionality enhancement across our joint product lines. * Our
combined company will be better positioned to enter the far larger
and faster growing OTC markets through initiatives like
FXMarketSpace(TM) and SwapStream(TM), which provide entry into the
$2 trillion per day FX market and the $1 trillion per day interest
rate swaps market. Member Benefits: Our merger provides superior
economic benefits to member shareholders. * Our Exercise Rights
guarantee provides far greater flexibility and upside potential for
ERP Holders who want full and equal treatment. * Our core rights
protections ensure our continued commitment to providing choice
between electronic and open outcry trading. * We have a
long-standing pricing strategy of providing the lowest trading fees
for member liquidity providers, with discounts that significantly
exceed anything offered by ICE. * Our trading floor and trading
platform consolidations will save member firms and large direct
access customers at least $70 million per year in costs.
Integration: Our size and scale allows us to seamlessly integrate
our businesses with minimal risks and no distractions from new
growth opportunities. * CME has integrated clearing and trade
matching for the second and third largest futures exchanges in the
U.S., respectively, within months and without disruption --
facilitating immediate growth. * CME and CBOT have completed 7
months of detailed integration planning and are ready to integrate
immediately upon closing. More Flexible Liquidity: Our cash
dividend, ERP guarantee and fixed price tender offer will provide
more flexible opportunities for liquidity without compromising the
total value of ownership. * Our merger agreement provides immediate
liquidity for all CBOT members and shareholders as a result of our
pre-closing cash dividend of $9.14 per share (or $250,000 for a
Full Member shareholder). * ERP Holders of a B-1 membership and one
or more ERPs as of May 29th who do not wish to wish to continue
litigating can transfer their ERP to the combined company within 45
days of closing and receive an additional payment of $250,000. Our
merger agreement provides you with a valuable and more stable
currency, larger and more realizable growth opportunities,
significant member benefits and low integration risks or
distractions. Additionally, with regulatory clearance behind us,
there are no material third-party conditions to the completion of
our merger other than shareholder and member approvals. In
contrast, ICE is asking you to reject a compelling merger
opportunity when it has been rejected twice by your Board of
Directors and management as an inferior offer. ICE is asking CBOT
members and shareholders to assume the significant operational
risks and potential value destruction associated with its proposal.
It is asking you to jettison your board's strategy and your
opportunity to benefit in a CBOT/CME combination in the hope that
it will complete a merger with you. ICE is asking you to give up
control and governance of the institution CBOT members built
without proportionate representation. ICE is asking you to ignore
the competitive realities in today's marketplace by focusing on a
lengthy and risky integration, while giving others the opportunity
to erode the value of your franchise. As members and shareholders
of CBOT Holdings you are sophisticated market participants. You
understand risk. The choice is clear: vote "YES" the CBOT/CME
combination. Sincerely, Terry Duffy Craig Donohue Forward-Looking
Statements This document may contain forward-looking information
regarding Chicago Mercantile Exchange Holdings Inc. and CBOT
Holdings, Inc. and the combined company after the completion of the
merger that is 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, the benefits of the business combination
transaction involving CME and CBOT, including future financial and
operating results, the new company's plans, objectives,
expectations and intentions and other statements that are not
historical facts. Such statements are based on current beliefs,
expectations, forecasts and assumptions of CME and CBOT's
management which are subject to risks and uncertainties which could
cause actual outcomes and results to differ materially from these
statements. Other risks and uncertainties relating to the proposed
transaction include, but are not limited to the satisfaction of
conditions to closing; including receipt of shareholder and member
approvals; the proposed transaction may not be consummated on the
proposed terms; uncertainty of the expected financial performance
of CME following completion of the proposed transaction; CME may
not be able to achieve the expected cost savings, synergies and
other strategic benefits as a result of the proposed transaction;
the integration of CBOT with CME's operations may not be successful
or may be materially delayed or may be more costly or difficult
than expected; general industry and market conditions; general
domestic and international economic conditions; and governmental
laws and regulations affecting domestic and foreign operations. For
more information regarding other related risks, see the Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q of CME and
CBOT Holdings for their fiscal years ended December 31, 2006 and
their quarters ended March 31, 2007. Said documents are available
online at http://www.sec.gov/ or on request from CME or CBOT
Holdings, respectively. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
document. Except for any obligation to disclose material
information under the Federal securities laws, neither CME nor CBOT
Holdings undertakes any obligation to release publicly any
revisions to any forward-looking statements to reflect events or
circumstances after the date of this document. Chicago Mercantile
Exchange Holdings Inc. (NYSE:CMENASDAQ:CME) became the first
publicly traded U.S. financial exchange on Dec. 6, 2002. The
company was added to the Russell 1000(R) Index on July 1, 2003, and
to the S&P 500(R) Index on Aug. 10, 2006. It is the parent
company of Chicago Mercantile Exchange Inc. (http://www.cme.com/),
the world's largest and most diverse financial exchange. As an
international marketplace, CME brings together buyers and sellers
on the CME Globex(R) electronic trading platform and on its trading
floors. CME offers futures and options on futures in these product
areas: interest rates, stock indexes, foreign exchange,
agricultural commodities, energy, and alternative investment
products such as weather, real estate and economic derivatives. CME
is a wholly owned subsidiary of Chicago Mercantile Exchange
Holdings Inc. (NYSE:CMENASDAQ:CME). Further information about
Chicago Mercantile Exchange Holdings Inc. and Chicago Mercantile
Exchange Inc. is available on the CME Web site at
http://www.cme.com/. CME-G DATASOURCE: Chicago Mercantile Exchange
Holdings Inc. CONTACT: Media, Anita Liskey, +1-312-466-4613, or
Allan Schoenberg, +1-312-930-8189, , or Investors, John Peschier,
+1-312-930-8491, both of Chicago Mercantile Exchange Web site:
http://www.cme.com/
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