Revised Agreement Represents Full and Final Offer, Maintains
Original Exchange Ratio and Cash Consideration Per Share CHICAGO
and NEW YORK, July 18 /PRNewswire-FirstCall/ -- CME Group Inc.
(NASDAQ:CME) and NYMEX Holdings, Inc. (NYSE:NMX) today announced
they have revised the terms of their merger agreement, representing
CME Group's full and final offer to acquire NYMEX Holdings (NYMEX)
and that the boards of directors of both companies and of New York
Mercantile Exchange, Inc. have approved the revised agreement. The
exchange ratio and cash consideration per share offered to holders
of NYMEX Holdings common stock in the companies' original agreement
will remain unchanged. The revised agreement increases the
consideration payable to NYMEX Class A members from $612,000 to
$750,000 per membership. Additionally, NYMEX Class A members will
retain the right to use or lease their memberships for NYMEX open
outcry and electronic trading purposes, the number of Class A
memberships will be limited to 816 and the NYMEX seat market will
be preserved. Substantially all other rights, including the revenue
sharing rights contained in Section 311(G) of the NYMEX bylaws will
be eliminated and replaced with the following commitments: --
Trading Floor Commitment: NYMEX will maintain a trading floor in
the current NYMEX facility until December 31, 2012; or, if the
occupancy agreement is terminated, a trading floor will be
maintained elsewhere in New York City. Thereafter, NYMEX will
maintain a trading floor in New York City as long as profitability
and revenue thresholds are met. If a trading pit is closed, it will
not be reopened in Chicago for at least 18 months if a majority of
NYMEX Class A members oppose the move. -- Member Differentiated
Pricing: For so long as CME or CBOT members retain a differentiated
and lower fee than non-member customers of CME or CBOT,
respectively, NYMEX will maintain differential pricing such that
NYMEX Class A members are charged lower fees than non-members on
current NYMEX products. -- Trading Rights Commitments: NYMEX will
preserve current NYMEX rules regarding account-based trading for
Class A members, as well as rules establishing that clearing member
firms or member firms must hold two full Class A memberships to
clear at NYMEX or receive member rates. The change in Class A
member rights will be accomplished through amendments to the
certificate of incorporation and bylaws of NYMEX which require the
affirmative vote of the owners of 75 percent of the outstanding
NYMEX Class A memberships. The approval of these amendments is a
condition to the closing of the merger. Class A members will
receive the specified consideration upon the closing of the merger
and execution of a required release. The companies have set July
18, 2008, as the record date for shareholders and members entitled
to vote at the companies' special meetings. NYMEX shareholders and
members and CME Group shareholders will vote on the transaction on
August 18, 2008, subject to completing SEC review. General Atlantic
LLC, which holds an approximately 7 percent equity stake in NYMEX,
has endorsed the revised merger agreement and has committed to
fully support the combination of CME Group and NYMEX, including
committing to vote all of its NYMEX shares in favor of the
transaction. Additionally, each director on the boards of NYMEX
Holdings, NYMEX and CME Group has indicated an intent to vote all
of their shares, and as applicable, their NYMEX seats, in favor of
the merger. The companies also announced that NYMEX has accepted
the offer made by Chairman Richard Schaeffer, President and Chief
Executive Officer James Newsome and other members of the executive
management team to reduce their change in control severance
benefits, which combined with the reduction of certain other merger
related expenses by NYMEX, will equal $30 million in the aggregate.
Separately, the parties announced that they have entered into an
agreement to extend the term for their highly successful technology
partnership for an additional two years until 2018, and delayed the
early termination right of either party by one year. This extension
is effective following the NYMEX and CME shareholder vote. Upon a
successful completion of the CME Group/NYMEX transaction, the
technology partnership will no longer be in effect as the parties
will utilize the CME Globex platform as the electronic trading
solution for the combined company. "CME Group and NYMEX have the
potential to create tremendous value for our shareholders,
customers and members, and today's revised merger agreement makes
that opportunity a reality," said CME Group Executive Chairman
Terry Duffy. "We remain committed to maintaining a significant
presence in the NYMEX facility in New York and working with the
NYMEX Class A members to achieve a seamless and successful
integration." "We believe that the merger with CME is in the best
interests of all NYMEX shareholders and Class A Members," said
NYMEX Chairman Richard Schaeffer. "CME Group remains the best
partner for continuing to build the NYMEX business around the
world, and NYMEX senior management has demonstrated that we are
absolutely committed to delivering the benefits of this combination
to our shareholders and members. We look forward to proceeding to
our vote and focusing on a smooth integration so that our combined
company can quickly achieve its significant growth potential." "We
believe the additional consideration and commitments offered to
NYMEX Class A members are warranted to compensate Class A members
for the value of the rights they are giving up, which is essential
to the successful integration of NYMEX into CME Group, while also
solidifying Class A members' commitment as users of the exchange in
a way that should benefit all of our shareholders," said CME Group
Chief Executive Officer Craig Donohue. "As we look to further
expand our business and generate efficiencies for all stakeholders,
we are committed to completing this transaction and creating $60
million in cost synergies for shareholders. This transaction will
also produce millions of dollars in savings for our clearing firms
and additional efficiencies for customers, will further diversify
our revenues going forward and better position our combined company
to compete globally in all asset classes." "We are pleased today to
move closer to completing our transaction with CME Group," said
NYMEX President and Chief Executive Officer James E. Newsome. "We
continue to believe that a combination with CME Group is the best
way to expand our opportunity for growth overall, and the
enhancements announced today are further evidence of our confidence
in and dedication to this transaction. Bill Ford, a member of
NYMEX's Board of Directors and CEO of global growth investment firm
General Atlantic LLC, stated, "As a growth investor and a
prospective significant shareholder in the combined company,
General Atlantic fully supports this transaction because we believe
it provides the best strategic opportunity for NYMEX's long-term
growth. Together, NYMEX and CME Group will provide shareholders an
investment in the largest and most diversified global futures and
derivatives exchange, with world class technology, an outstanding
management team and the opportunity for significant business
synergies. Moreover, we believe the revised terms of the merger
agreement will allow for an even more vibrant and competitive
marketplace for current NYMEX Class A members and customers.
General Atlantic will vote all of our shares in favor of the
merger, and we look forward to participating in the growth and
success of the combined company." Strategic Benefits of the
Transaction: -- Financially Attractive: CME Group and NYMEX
Holdings expect the transaction to become accretive to earnings on
a GAAP basis within 12 to 18 months after the closing. -- Synergy
Opportunities: Anticipated pre-tax cost savings of approximately
$60 million annually, driven primarily by technology and
administrative cost reductions. -- Operational Efficiencies:
Expected customer benefits derived from clearing efficiencies,
harmonized trading and administrative technology systems. --
Strategic Position: Affords CME Group the opportunity to continue
to provide a regulated, transparent exchange for global energy and
metals market participants. -- Commitment to New York: The combined
company will maintain a significant presence in New York City,
continuing to develop the futures industry in New York and around
the world. -- Global Growth: The combination will also
significantly expand CME Group's presence where energy and metals
products are central to risk management strategies, particularly in
the Middle East and Asia. -- Worldwide Partnerships: Efforts to
expand NYMEX's energy presence globally through its existing
relationships with the Dubai Mercantile Exchange, the Norwegian
derivatives exchange, Imarex, the recently announced Green Exchange
and the initiative with LCH remain unchanged under the terms of the
agreement and will complement CME Group's existing partnerships
with BM&F and Korea Exchange. The transaction is subject to
approvals of shareholders of both companies and of NYMEX Class A
members, as well as the satisfaction of customary closing
conditions. Subject to obtaining the necessary approvals, the
companies expect to close the merger in the third quarter of 2008.
About CME Group CME Group (http://www.cmegroup.com/) is the world's
largest and most diverse exchange. Formed by the 2007 merger of the
Chicago Mercantile Exchange (CME) and the Chicago Board of Trade
(CBOT), CME Group serves the risk management needs of customers
around the globe. As an international marketplace, CME Group brings
buyers and sellers together on the CME Globex electronic trading
platform and on its trading floors. CME Group offers the widest
range of benchmark products available across all major asset
classes, including futures and options based on interest rates,
equity indexes, foreign exchange, agricultural commodities, and
alternative investment products such as weather and real estate.
CME Group is traded on the NASDAQ under the symbol "CME." About
NYMEX Holdings, Inc. NYMEX Holdings, Inc. (NYSE:NMX) is the parent
company of New York Mercantile Exchange, Inc., the world's largest
physical commodities exchange, offering futures and options trading
in energy, metals and other contracts and clearing services for
more than 400 off-exchange contracts. Through a hybrid model of
open outcry floor trading and electronic trading on the CME
Globex(R) electronic platform, as well as clearing off-exchange
instruments through NYMEX ClearPort(R) Clearing, NYMEX offers crude
oil, petroleum products, natural gas, coal, electricity, gold,
silver, copper, aluminum, platinum group metals, emissions, and
soft commodities contracts for trading and clearing virtually 24
hours each day. Further information about NYMEX Holdings, Inc. and
the New York Mercantile Exchange, Inc. is available on the NYMEX
website at http://www.nymex.com/. Additional Information Forward
Looking Statements: This press release may contain forward-looking
information regarding CME Group Inc. ("CME Group") and NYMEX
Holdings, Inc. ("NYMEX Holdings") and the combined company after
the completion of the 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, the benefits of the business
combination transaction involving CME Group and NYMEX Holdings,
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 Group's and
NYMEX Holdings' management which are subject to risks and
uncertainties which could cause actual outcomes and result 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, antitrust, regulatory and other approvals
on the proposed terms and schedule; the proposed transaction may
not be consummated on the proposed terms and schedule; uncertainty
of the expected financial performance of CME Group following
completion of the proposed transaction; CME Group may not be able
to achieve the expected cost savings, synergies and other strategic
benefits as a result of the proposed transaction or may take longer
to achieve the cost savings, synergies and benefits than expected;
the integration of NYMEX Holdings with CME Group'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 Item 1A of CME Group's Annual Report on Form 10-K for
the fiscal year ended December 31, 2007 and Item 1A of NYMEX's
Annual Report on Form 10-K for the fiscal year ended December 31,
2007 and additional updates to these risks contained in our
Quarterly reports. Copies of said 10-Ks and 10-Qs are available
online at http://www.sec.gov/ or on request from the applicable
company. You should not place undue reliance on forward-looking
statements, which speak only as of the date of this press release.
Except for any obligation to disclose material information under
the Federal securities laws, CME Group and NYMEX Holdings undertake
no obligation to release publicly any revisions to any forward-
looking statements to reflect events or circumstances after the
date of this press release. Important Merger Information In
connection with the merger transaction involving CME Group and
NYMEX Holdings, CME Group has filed a registration statement on
Form S-4 with the Securities and Exchange Commission ("SEC") on
June 11, 2008 containing a preliminary joint proxy
statement/prospectus. The registration statement has not yet become
effective. This material is not a substitute for the final
prospectus/proxy statement or any other documents the parties will
file with the SEC. Investors and security holders are urged to read
the final prospectus/proxy statement and any other such documents,
when available, which will contain important information about the
proposed transaction. The final prospectus/proxy statement will be,
and other documents filed or to be filed by CME Group with the SEC
are or will be available free of charge at the SEC's Web site (
http://www.sec.gov/ ) or from CME Group Inc., Attention:
Shareholder Relations, 20 S. Wacker Drive, Chicago, Illinois 60606
, (312) 930-1000 or NYMEX Holdings, Inc., Attention: Investor
Relations, at One North End Avenue, World Financial Center, New
York, New York 10282, (212) 299-2000. CME Group and NYMEX Holdings
and their respective directors, executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies from CME Group and
NYMEX Holdings shareholders in respect of the proposed transaction.
Information regarding CME Group and NYMEX Holdings' directors and
executive officers is available in their respective proxy
statements for their 2008 annual meeting of stockholders.
Additional information regarding the interests of such potential
participants is included in the joint proxy statement/prospectus
and the other relevant documents filed with the SEC when they
become available. This document shall not constitute an offer to
sell or the solicitation of an offer to buy any 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. CME-G DATASOURCE: CME Group
Inc.; NYMEX Holdings, Inc. CONTACT: Press Inquiries, Allan
Schoenberg of CME Group, +1-312-930-8189, ; or Anu Ahluwalia of
NYMEX, +1-212-299-2439, ; or Investors, John Peschier of CME Group,
+1-312-930-8491; or Keil Decker of NYMEX, +1-212-299-2209 Web site:
http://www.cme.com/
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