CME and CBOT Announce Reduced Class A Share Requirements for Clearing Members
June 20 2007 - 2:30PM
PR Newswire (US)
Plan Provides another Customer Benefit of CME/CBOT Merger by
Enabling Clearing Members to Reduce Shareholdings CHICAGO, June 20
/PRNewswire-FirstCall/ -- To reduce costs associated with required
shareholdings for clearing members of CME and CBOT, Chicago
Mercantile Exchange Holdings Inc. (NYSE:CMENASDAQ:CME) and CBOT
Holdings (NYSE:BOT) today announced that, upon the completion of
their merger anticipated in mid 2007, the combined company will
reduce the requisite number of CME Group Class A Shares its
clearing members must acquire and hold as part of their capital
investment requirement. Effective upon the close of the merger,
CBOT-only clearing firms will be required to hold 8,000 shares of
CME Group Class A common stock. Effective August 1, CBOT clearing
firms would be required to hold 27,000 shares of CBOT Class A
common stock and, based on the exchange ratio provided in the
companies' merger agreement, today's announcement represents a
reduction of 1,450 shares for those clearing members. CME-only
clearing firms will continue to be required to hold 8,000 shares of
CME Group Class A common stock, following a reduction in
shareholding requirements implemented in February 2007. Joint
clearing members (firms with clearing member status of both CME and
CBOT) will be required to hold 12,000 shares of CME Group Class A
stock, a reduction of 4,000 shares from the shares required to hold
individual CME and CBOT clearing memberships. As a result of the
share requirement reduction, a total of approximately 260,000
shares would no longer be required to be held by clearing members,
substantially less than the average volume of CME stock traded in a
single day. In the first quarter of 2007, CME shares traded an
average of approximately 800,000 shares per day. "We feel very
strongly that a CME/CBOT merger creates the greatest benefits for
our global customer base," said CME Executive Chairman Terry Duffy.
"We are reducing the capital investment requirement for our
clearing member firms as part of our continuing efforts to lower
their transaction costs and increase their capital efficiencies."
"Today's announcement translates into the release of $2 million in
value for each of our joint clearing members," said CBOT Chairman
Charlie Carey. "We are very pleased to again demonstrate our
commitment to serving our customers and clearing members, as well
as our commitment to building value in the proposed CME Group."
"CME and CBOT have a track record for unlocking equity value for
our clearing member firms," said CME Chief Executive Officer Craig
Donohue. "As a combined company, we will reduce costs for new
members, while making our diverse products and services even more
accessible to market participants worldwide." Following the merger,
new clearing members will be required to acquire and hold 8,000
shares of CME Group Class A stock for CME-only or CBOT-only
clearing memberships. New clearing members with joint clearing
membership will be required to acquire and hold 12,000 shares of
CME Group Class A stock. About CME CME (http://www.cme.com/) is 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), which is part of the Russell
1000(R) Index and the S&P 500(R) Index. About the CBOT As one
of the leading global derivative exchanges, the Chicago Board of
Trade provides a diverse mix of financial, equity and commodity
futures and options-on-futures products. Building on its 159-year
history, the CBOT continues to advance into the future using the
strength of deep liquidity, market integrity and member-trader
expertise. Using superior trading technology in both electronic and
open-auction trading platforms, the CBOT provides premier customer
service to risk managers and investors worldwide. For more
information, visit our website at http://www.cbot.com/.
Forward-Looking Statements This press release 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
press release. 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 press release. Additional
Information CME and CBOT have filed a definitive joint proxy
statement/prospectus, as supplemented, with the Securities and
Exchange Commission (SEC) in connection with the original
transaction. This press release is not a substitute for the
definitive joint proxy statement/prospectus, as supplemented, or
any other documents CME and CBOT have filed or will file with the
SEC. Investors and security holders are urged to read the
definitive joint proxy statement/prospectus as amended and
supplemented and any other relevant documents filed or to be filed
by CME or CBOT because they contain or will contain important
information about the proposed transaction. The definitive joint
proxy statement/prospectus as amended and supplemented, and other
documents filed or to be filed by CME and CBOT with the SEC are or
will be, available free of charge at the SEC's Web site
(http://www.sec.gov/) or from Chicago Mercantile Exchange Holdings
Inc., Shareholder Relations and Membership Services, 20 South
Wacker Drive, Chicago, Illinois 60606, Attention: Beth Hausoul and
from CBOT Holdings, Inc., Attn: Investor Relations, at 141 West
Jackson, Chicago, Illinois 60604 or calling (312) 435-3500. CME and
its directors, executive officers and other employees may be deemed
to be participants in the solicitation of proxies in connection
with the proposed transaction. Information about CME's directors
and executive officers is available in the definitive joint proxy
statement/prospectus. CBOT and its respective directors and
executive officers and other members of management and employees
and other CBOT members may be deemed to be participants in the
solicitation of proxies from CBOT shareholders in respect of the
proposed transaction. Information regarding CBOT directors and
executive officers is available in CBOT's proxy statement for its
2007 annual meeting of stockholders, dated March 29, 2007.
Additional information regarding the interests of such potential
participants is included in the joint proxy statement/prospectus,
as supplemented, and the other relevant documents filed with the
SEC. 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 U.S.
Securities Act of 1933, as amended. CME-G DATASOURCE: Chicago
Mercantile Exchange Holdings Inc. CONTACT: media, Allan Schoenberg,
+1-312-930-8189, or investors, John Peschier, +1-312-930-8491, both
of CME; or media, Maria C. Gemskie, +1-312-341-3257, or investors,
Deborah Koopman, +1-312-789-8532, both of CBOT Web site:
http://www.cme.com/ http://www.cbot.com/
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