Filed by Chicago Mercantile Exchange Holdings Inc. pursuant
to Rule 425 under the Securities Act of 1933, as amended, and
deemed filed pursuant to Rule 14a-6 under the
Securities Exchange Act of 1934, as amended.
Subject Company: CBOT Holdings, Inc.
Subject Companys Commission File No.:001-32650
CME/CBOT MERGER:
THE RIGHT TRADE FOR CBOT
MEMBERS AND SHAREHOLDERS
CME/CBOT MERGER |
ICE PROPOSAL | |||
LONG-TERM POTENTIAL | Creates worlds largest and most valuable exchange, best positioned to compete and thrive in todays globally competitive environment | Combination with niche player does not materially enhance CBOTs position | ||
GROWTH OPPORTUNITES | Largest player in every major asset class with most liquid benchmark products and strongest distribution network, trading platforms and clearing capabilities; More OTC and spot market opportunities; More potential revenue synergies from complementary products; Stronger history of and potential for product innovation | More limited growth opportunities; Flattening volume; Limited track record; Speculative synergy projections | ||
SHAREHOLDER VALUE | Combined market capitalization of roughly $30 billion; Diversity of revenue and strong balance sheet positions shareholders to benefit from new organic growth opportunities, as well as mergers, acquisitions and partnerships | Value of ICE stock not trading on fundamentals; Undervalued ERP proposal; Uncertain synergies | ||
MEMBER BENEFITS | Superior cash dividend, ERP solution and fixed price tender offer provides greater flexibility and upside potential; Protects core rights and tiered pricing for member liquidity providers; Preserves common clearing link and $1 billion in margin efficiencies; Consolidation of floor and trading platforms creates $70 million in member savings opportunities | History of less-favorable member pricing, declining seat values; Lack of consolidated trading floors and platforms | ||
ABILITY TO INTEGRATE | Ready to start seamless integration on Day One, with minimal risk and no distraction from new growth opportunities | Catastrophic integration risk; Questionable clearing and technology; Independent experts predict at least two years to complete integration | ||
þ YES |
The Choice Is Clear: Vote For the CME/CBOT merger by July 9th!
For additional information, contact DF King & Co., Inc. at 1-800-769-7666 |
For additional information, contact Georgeson, Inc. at 1-866-834-7793 |
Forward-Looking Statements This advertisement 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. The actual results or performance by CME or CBOT or the combined company, and issues relating to the transaction, could differ materially from those expressed in, or implied by, any forward-looking statements relating to those matters. Information regarding the risks that may affect the parties performance and the performance of the combined company can be found in their filings with the Securities and Exchange Commission, including Item 1A of CMEs Annual Report on Form 10-K for the fiscal year ended December 31, 2006, their most recent quarterly reports on Form 10-Q and their definitive joint proxy statement/prospectus, as supplemented. Copies of said reports are available online at http://www.sec.gov or on request from the CME. You should not place undue reliance on forward-looking statements, which speak only as of the date of this advertisement. Except for any obligation to disclose material information under the Federal securities laws, CME undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this advertisement.
Additional Information CME and CBOT have filed a definitive joint proxy statement/prospectus with the Securities and Exchange Commission (SEC) in connection with the proposed transaction. The parties intend to file a supplement to the joint proxy statement/prospectus and mail such supplement to CME and CBOT shareholders as of the record date for the special meetings. This advertisement 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 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 is, and the supplement thereto 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 SECs Web site (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.
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 regarding CMEs directors and executive officers is available in CMEs proxy statement for its 2007 annual meeting of shareholders, dated March 17, 2007. Additional information regarding the interests of such potential participants is available in the definitive joint proxy statement/prospectus, as supplemented, and the other relevant documents filed with the SEC. CBOT 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 regarding CBOT directors and executive officers is available in CBOTs 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 and the other relevant documents filed with the SEC.
June 25, 2007
SETTING THE RECORD STRAIGHT ON THE CME/CBOT MERGER:
KNOW THE RISKS OF DEALING WITH ICE
Dear CBOT Shareholders:
We are sending this letter to set the record straight and make sure that all CBOT members and shareholders have the facts they need to see through the ICE propaganda and understand the significant risks of their proposal.
ICE Offers a Riskier Currency
The current ICE stock price is clearly being driven by a takeover premium, not by fundamentals. But dont just take our word for it. The financial community has issued a number of clear warnings about the risk of ICEs stock:
Bank of Montreal: If it became evident ICE would win [CBOT], ICE stock would fall substantially. Mike Vinciquerra 6/14/07
Bank of America: Takeout speculation has been fueling the stock of late, but we do not believe a takeout is likely near-term. And while fundamentals have been decent, we are not sure they are strong enough to support the stock at current levels. Chris Allen 6/14/07
Goldman Sachs: The biggest risk to our price target is ICEs potential acquisition of BOT. While the transaction would have attractive long term accretion, there are significant hurdles to completing the integration. Further, should NYMEX attract a larger share of commodity volumes or the global OTC market slow, earnings could underperform our expectations. Daniel Harris 6/14/07
CIBC: We believe that ICEs stock has traded higher since the CME revised offer in expectation that ICE would not succeed in its bid attempt and would itself become a takeover target. Niamh Alexander 6/13/07
Deutsche Bank: We believe ICE would have to raise its bid substantially to overcome CMEs operational advantage, with DOJ approval, and that any new bid could pressure ICE shares to the downside. Rob Rutschow 6/13/07
Credit Suisse: We believe the greatest near-term risk to our ICE call relates to its bid to merge with CBOT. We believe a successful bid would likely lead to sizeable equity issuance/earnings dilution, higher investment spending and integration risk while dampening ICEs stand-alone high growth franchise. Howard Chen 6/11/07
ICE Provides a High Risk Proposition
The facts are clear. ICE does not have the technology or clearing capabilities to manage CBOT business. To accommodate your trading activity, ICE Clear will have to increase its clearing capacity by thirteen times NYBOTs average daily transactions and nineteen times its peak transactions. To handle your electronic trading volume on its platform, ICE will have to increase its technology capacity by six times to handle an average CBOT day and ten times to handle your peak days. Again, you dont have to take our word for it.
Richard Dennis, Independent Trader: When it comes to the reliability of trading platforms, the Merc is a nine, the Board of Trade is a six and ICE is a one, (Richard) Dennis told the Sun-Times. He said that of all the trading glitches he encounters, 80 percent of them are due to ICE and the rest equally to the Board of Trade and the Merc. Chicago Sun-Times 6/21/07
Computer Sciences Corporation, an independent technology consulting firm: transferring to the ICE platform would create substantial risk to CBOT and its pools of liquidity. CSC Report May 2007
Keep in mind that ICE is still integrating NYBOT and NGX; it still needs to integrate ChemConnect; it stills needs to build new data centers; it still needs to build out NYBOTs clearing; it still needs to build a London clearing operation; and it just announced another merger with the Winnipeg Commodity Exchange.
ICE Wants to Minimize the Value of Your CBOE Exercise Rights
Through its proposal with CBOE, ICE has undervalued your exercise rights. Why have CBOE and ICE drastically undervalued the ERP, offering to buy out your ERPs for a fraction of their value? Do you really trust that ICE and CBOE will protect that value? In contrast, CME and CBOT have now provided a minimum value of $500,000 per ERP along with the upside to unlock the full value.
Jerry Zordani, CBOT member: The Mercs latest offer is very compelling. It preserves the exercise rights. Chicago Tribune 6/15/2007
CBOT/CME Merger is the Right Trade for CBOT Members and Shareholders
A CBOT/CME combination delivers real and immediate and long-term benefits for members, shareholders and customers. Together, we will be the industrys leading exchange with a powerful growth strategy. We will offer the most worlds most diverse
derivatives product line available via state of the art trading platform or floor. We will have world-class clearing that will continue to provide over $1 billion in margin efficiencies. We will continue our collective tradition of providing preferred pricing for high volume producers. We have regulatory clearance. Andwe are ready to integrate today and can begin delivering value immediately.
As members and shareholders of CBOT Holdings you are sophisticated market participants. You understand risk. On July 9, the choice is clear: vote YES on a CBOT/CME combination.
Sincerely, | ||||
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 companys 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 CMEs and CBOTs 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, member, antitrust, regulatory and other approvals on the proposed terms; the proposed transaction may not be consummated on the proposed terms; uncertainty of the expected financial performance of the combined company following completion of the proposed transaction; the combined company 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 CBOTs operations with CMEs 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.
More information regarding other risks that may affect the parties performance can be found in their filings with the Securities and Exchange Commission, including Item 1A of CMEs Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and their most recent quarterly reports on Form 10-Q. Copies of said reports are available online at http://www.sec.gov or on request from the CME. 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 undertakes no 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 with the Securities and Exchange Commission (SEC) in connection with the proposed transaction. The parties intend to file a supplement to the joint proxy statement/prospectus and mail such supplement to CME and CBOT shareholders as of the record date for the special meetings. 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 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 is, and the supplement thereto 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 SECs Web site (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.
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 regarding CMEs directors and executive officers is available in CMEs proxy statement for its 2007 annual meeting of shareholders, dated march 17, 2007. Additional information regarding the interests of such potential participants is available in the definitive joint proxy statement/prospectus, as supplemented, and the other relevant documents filed with the SEC.
Statements included in this press release relating to the ICE offer reflect the views of CMEs management.
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/CBOT:
A Combination to Compete Successfully in the Global Marketplace Presentation to ISS Craig Donohue, CEO |
© Chicago Mercantile Exchange Inc. All rights reserved. 2 Discussion of Forward-Looking Statements Forward-Looking Statements This presentation 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 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 and
CBOT, including future financial and operating results, the new companys 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 CBOTs 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, member, antitrust, regulatory and other approvals on the proposed terms; 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 CMEs 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
CMEs Annual Report on Form 10-K for the fiscal year ended December 31, 2006. Copies of said 10-K is available online at http://www.sec.gov or on request from the CME. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation. Except for
any obligation to disclose material information under the Federal securities laws, CME
undertakes no obligation to release publicly any revisions to any forward-looking
statements to reflect events or circumstances after the date of this presentation.
Additional Information CME and CBOT have filed a definitive joint proxy statement/prospectus with the Securities and
Exchange Commission (SEC) in connection with the proposed transaction. The parties intend
to file a supplement to the joint proxy statement/prospectus and mail such supplement to
CME and CBOT shareholders as of the record date for the special meetings. 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 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 is, and the supplement thereto 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 (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. 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 regarding CMEs directors and executive officers is available in CMEs proxy statement for its 2007 annual meeting of shareholders, dated march 17, 2007. Additional information regarding the
interests of such potential participants is available in the definitive joint proxy
statement/prospectus, as supplemented, and the other relevant documents filed with the
SEC. Statements included in this press release relating to the ICE offer reflect the views
of CME's management. 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. |
© Chicago Mercantile Exchange Inc. All rights reserved. 3 Comparison of Price/Earnings Ratios 17.3 24.0 Nasdaq 19.4 21.9 DBAG 23.0 30.9 NYSE Euronext 36.1 42.5 BOT 37.1 51.2 NMX 27.4 35.3 CME Price/Earnings Ratio 2008 2007 32.1 46.8 ICE ICEs P/E ratios are out of range from their exchange peers Note: Source CME/CBOT S-4 Filing and Reuters, based on closing prices as of 06/07/21 Take over speculations drive price/earnings ratios Historically, CME has had a P/E ratio higher than ICE |
© Chicago Mercantile Exchange Inc. All rights reserved. 4 ICE CME Value Comparison from an Institutional Shareholder Perspective CME stock price (tender offer) $560.00 Implied offer price $196.00 Plus dividend $9.14 Value to institutional shareholder $205.14 On a risk adjusted basis, taking into consideration long term growth opportunities, integration risks and currency risks, CMEs offer is superior * estimated by Mike Vinciquerra, BMO Capital Markets (6/15/07) Analysts have raised concerns about ICEs integration capabilities and current valuation ... ICE stock price (06/21/07 close) $158.55 Implied offer price $225.14 Less takeover premium (15%* to 5% assumed) $(34) - $(11) Less breakup fee ($294m) ($5.54) Less funding of ERP solution (16% of $333m) ($3.35) Value to institutional shareholder $182.48-$205.00 |
© Chicago Mercantile Exchange Inc. All rights reserved. 5 Risks to ICE Value If it became evident ICE would win [CBOT], ICE stock would fall substantially, perhaps to $135 or $140. ~Mike Vinciquerra, BMO Capital Markets (6/15/07) We continue to highlight ICEs merger proposal for CBOT as the greatest near-term risk to our thesis. ~Credit Suisse (6/13/07) We believe any alternative transaction [to the CME / CBOT transaction] would take on significantly higher clearing integration risk. ~Credit Suisse (6/13/07) The most important and contentious points in the ICE offer, namely the integration plans and promises (timing, risk, and synergies), are unchanged. ~Fox-Pitt, Kelton (6/13/07) Recent analysts concerns ... nor does ICE have the scale, scope or reach to mitigate these potential risks |
© Chicago Mercantile Exchange Inc. All rights reserved. 6 $120 $140 $160 $180 $200 $220 ICE Stock Price No Longer Driven by Fundamentals G [A] 5/11: CME increases exchange ratio to 0.3500x [B] 5/15: ICE announces 6/15 launch of Electronic NYBOT financial products [C] 5/21: N. Chai, CFO of NYX, states ICE put itself in play
[D] 5/24: ICE announces it will hold CBOT member meeting [E] 5/30: ICE and CBOE execute agreement regarding ERP [F] 5/31: ICE holds meeting with CBOT members [G] 6/4: ICE announces acquisition of ChemConnect; record May volume [H] 6/11: DOJ approves CME/CBOT merger [I] 6/12: ICE announces enhanced merger proposal [J] 6/14: CME/CBOT announce revised merger agreement [K] 6/18: ICE announces exclusive Russell license F ICE Spot ICE implied BOT Spot A C Note: CME implied is based on a 0.3500x exchange ratio B D E H I J K ICEs stock has take-over premium built into its price |
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Chicago Mercantile Exchange Inc. All rights reserved. 7 ICEs Current Stock Price / Takeover Premium If it became evident ICE would win [CBOT], ICE stock would fall substantially, perhaps to $135 or $140. ~Mike Vinciquerra, BMO Capital Markets (6/15/07) We believe that the current merger filled environment could produce a bidder for ICE as globalization in the sector appears to be just getting started. ~Wachovia (5/3/07) We believe that ICEs stock has traded higher since the CME revised offer in expectation that ICE would not succeed in its bid attempt and would itself become a takeover target. ~Credit Suisse (6/13/07) Analysts believe there could be up to a 15% takeover premium in ICEs stock price Recent analysts comments on takeover premium |
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Chicago Mercantile Exchange Inc. All rights reserved. 8 Currency Risks in NYSE / Euronext Transaction ($ in millions, except per share amounts) NYX Annotated Stock Price Chart ICE Annotated Stock Price Chart NYX stock has declined by 25% since Euronext shareholders approved transaction.... 12/31/07 Announcement Date Shareholder vote 5/22/2006 8/29/2006 12/6/2006 3/15/2007 6/22/2007 $40 $50 $60 $70 $80 $90 $100 $110 $120 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Price Volume Volume Traded NYSE Euronext 3/15/2007 5/11/2007 7/6/2007 9/3/2007 $120 $125 $130 $135 $140 $145 $150 $155 $160 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Price Volume Volume Traded IntercontinentalExchange Inc. Shareholder vote ... if the 15% takeover premium comes out of ICEs stock, CBOT shareholders would receive $24 less per share / $1.7B in aggregate |
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Chicago Mercantile Exchange Inc. All rights reserved. 9 Pro Forma Q107 ADV 6,454 741 3,866 3,866 0 2,000 4,000 6,000 8,000 10,000 12,000 CBOT/CME Eurex CBOT/ICE Euronext.liffe NYMEX CME/CBOT Proposed Merger contracts in 000s 10,320 4,607 Note: [1] Eurex and Euronext.liffe include individual equity and equity index options [2] NYMEX includes Clearport [3] Sources are company press releases and analyst presentations 7,295 3,431 1,512 CME and CBOT will create the largest exchange in the world |
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Chicago Mercantile Exchange Inc. All rights reserved. 10 CME CBOT ICE CBOT CME/CBOT Proposed Merger CBOT/CME have much greater presence across all major asset classes and are well positioned to leverage significant new growth opportunities CBOT/ICE CBOT/CME Note: CME ADV includes NYMEX products on CME Globex and ICE ADV includes ICE futures and NYBOT futures and options on futures Q1 2007 Combined ADV by Product Line (in 000s) 0 2,000 4,000 6,000 8,000 8,000 6,000 4,000 2,000 0 Interest Rates Equities FX Comm Energy Metals 6,671 2,305 555 724 586 154 3,032 142 15 818 531 65 Comm Energy Metals Interest Rates Equities FX |
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Chicago Mercantile Exchange Inc. All rights reserved. 11 May07 ADV 6.1M 3 rd highest month Jun07 ADV to date 9.1M CME Globex ® (electronic) CME Average Daily Volume Open Outcry Privately Negotiated (contracts in 000s) 6,358 03 02 01 00 04 917 05 06 07 (contracts in 000s) Annual Long Term Monthly Short Term CME ICE Futures Jan 07 Mar 07 May 07 Jun 07 MTD Apr 07 Feb 07 52% 0% 0 2,000 4,000 6,000 8,000 74% 0 2,000 4,000 6,000 8,000 |
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Chicago Mercantile Exchange Inc. All rights reserved. 12 CMEs Growth Strategy Globalizing our business Being a leading service provider of transaction processing services Expanding into over-the-counter/spot markets Leading product and technology innovation CME will be the leading global derivatives company by: |
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Chicago Mercantile Exchange Inc. All rights reserved. 13 Globalizing Our Business CME Globex
live access from
more
than 80 countries 7
European/ Asian hubs Regionally
focused sales, education and marketing to key targets Broadening relationships in emerging markets CME provides access to highly liquid markets across all major asset classes on an industry leading technology platform Interest rates Equities Foreign exchange Agricultural commodities Alternative investments Energy Metals |
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Chicago Mercantile Exchange Inc. All rights reserved. 14 Future opportunities in Asia, South America and possibly Europe Leading Service Provider in Transaction Processing Treasuries Ags Equities Metals Energy Metals Soft Commodities Transaction Processing Customer Benefits Scalable platforms Advanced functionality CME customer service standards Broad distribution/network effects Proven integration/ time-to- market advantages Increased profit potential through CME scale advantages |
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Chicago Mercantile Exchange Inc. All rights reserved. 15 NYMEX on CME Globex Leads Electronic Energy Trading 601 79 524 334 0 160 320 480 640 Q206 Q306 Q406 Q107 Q207 to date Total Energy ADV (contracts in thousands) NYMEX Energy on CME Globex ICE Futures NYMEX began trading on CME Globex on June 12, 2006 |
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Chicago Mercantile Exchange Inc. All rights reserved. 16 Significant Opportunities In Larger OTC/Spot Markets OTC Foreign Exchange OTC Interest Rate Swaps $2 trillion $1 trillion $0.5 trillion $0.1 trillion $0.05 trillion Global FX OTC Interest Rates US Treasuries US Equities Europe, Middle East & Africa Equities Average Daily Turnover Source: BIS 2004 Triennial Survey, SIA, Federal Reserve Bank of New York & World Federation of
Exchanges Celent Report |
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Chicago Mercantile Exchange Inc. All rights reserved. 17 OTC/Spot Market Opportunities Client acquisition and participation on the platform is continuing to diversify; pipeline is strong Liquidity is building; customers expressing satisfaction with bid/ask spreads and depth of book Broad geographic reach Favorable Market Trends Electronic Centralized clearing Algorithmic trading Transparency/anonymity $0 $150 $300 $450 $600 $750 $900 $1,050 $1,200 $1,350 Apr-07 May-07 June-07 MTD $331 $509 ADV (notional value in millions, USD) $1,206 |
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Chicago Mercantile Exchange Inc. All rights reserved. 18 $0 $50 $100 $150 $200 $250 $300 Interest Rate Market FX Market Credit Market Equity Market Commodity Market Larger, More Valuable OTC Growth Opportunities ICE Opportunities Source: June 2006 Notional Value Outstanding per March 2007 BIS Quarterly Review CBOT/CME Opportunities CBOT/CME is better positioned to immediately pursue the full scope of OTC growth opportunities $262 trillion $38 trillion $20 trillion $7 trillion $6 trillion |
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Chicago Mercantile Exchange Inc. All rights reserved. 19 Summary Timeline Original merger agreement - October 17, 2006 ICE offer rejected by CBOT - May 11, 2007 Revised merger agreement - May 11, 2007 DOJ clearance of merger agreement - June 11, 2007 Revised ICE offer rejected - June 14, 2007 CME/CBOT cash dividend and ERP solution adopted - June 14, 2007 CBOT member and CME/CBOT shareholder votes - July 9, 2007 Post-close, CME/CBOT in a position to integrate quickly and smoothly, while maintaining focus on growth initiatives |