CBOT's largest shareholder says no to Merc

Chicago -- Caledonia Investment, the Chicago Board of Trade's largest shareholder, cast a "no" vote on the Chicago Mercantile Exchange's planned acquisition of CBOT.

The Australian firm's vote Tuesday was seen by analysts as the shareholder wanting a better offer from CME, not as an endorsement of rival bidder IntercontinentalExchange Inc., Crain's Chicago Business reported Wednesday.

Caledonia's vote comes two weeks before CBOT shareholders are scheduled to vote on the Merc's $10.3-billion offer. If the exchange submits a new bid, the vote would be postponed by several days.

ICE, of Atlanta, offered $10.9 billion.

Both suitors have events scheduled to meet with CBOT shareholders.

Intercontinental CEO Jeffery Sprecher is sponsoring a reception, at which he is expected to urge CBOT members to vote "no." The mercantile exchange's top officials will press their case at a reception as well.

All three companies pled their cases to Institutional Shareholder Services, which offers recommendations to large shareholders on contested proxies. ISS is expected to release a report, perhaps as soon as this week.

Dozens of CBOT shareholders and members have come out against the deal, while dozens of CBOT members have said they will vote for it.

Copyright 2007 by United Press International.