Chicago Economic & Finance News - Page 8

the urban politician · #**141** Posted: **Apr 18, 2008, 2:09 AM**

16 Apr 2008
Influential Nymex investor group seeks raised CME offer

New York Post

A powerful group of New York Mercantile Exchange shareholders are threatening to kill the energy market's $11bn (€6.9bn) takeover by Chicago Mercantile Exchange, if the CME doesn't raise its price or at least try to boost its own shares, which are being used to finance the merger.

The group delivered a petition to Nymex earlier this week, signed by over 10% of the membership, which forces the company to hold a special meeting on June 3 so they can vent their frustrations. The members are particularly upset over the plummeting value of the CME's takeover bid, which has fallen by more than $2bn, or about $18 a share, since news of the merger surfaced in January.

The Chicago trading giant formally agreed to buy Nymex on March 17 for $36 a share in cash and 0.1323 shares of CME stock for each share of Nymex. CME shares on Tuesday closed at $484.49, implying a takeover offer of about $100 a share for Nymex.

the urban politician · #**142** Posted: **Apr 18, 2008, 2:53 AM**

This link has the full article:

NYMEX ARGUES CME BID IS TOO LOW
By ZACHERY KOUWE

April 16, 2008 -- Just like they do in the rough and tumble trading pits, powerful members of the New York Mercantile Exchange are driving a hard bargain in the energy market's $11 billion takeover by the rival Chicago Mercantile Exchange.

A group of Nymex shareholders are threatening to kill the deal if the CME doesn't raise its price or at least try to boost its own shares, which are being used to finance the merger.

the urban politician · #**143** Posted: **Apr 23, 2008, 2:49 AM**

Exchanges show how to tackle clearing conundrum
By Paul J Davies and Jeremy Grant

Published: April 23 2008 03:00 | Last updated: April 23 2008 03:00

Antonio Zoido, chief executive of Spain's Bolsa y Mercados Españoles, seemed frustrated at a recent London conference.

As the world's regulators struggled with how to bring more transparency to the over-the-counter derivatives markets, why were they not studying the exchanges, such as his?

"I haven't heard anyone say 'Hey, why don't we pay some attention to the organised markets?' I find myself a little isolated." Mr Zoido said, making the point that exchanges provided price discovery even in market turmoil. Yet by no means is he isolated. Exchanges are falling over each other to persuade anyone who may be listening that their model of on-exchange clearing could be a way to cut unwanted counterparty risks associated with the bilaterally-negotiated OTC derivatives markets.

The beauty of organised exchanges, they say, is that a clearing house steps in and takes on the counterparty risk, rather than forcing each participant to carry extra risk capital on their balance sheet to guard against default by the opposing side in a transaction.

Yesterday, the CME Group, the largest US futures exchange, could not resist mentioning how its record first quarter earnings illustrated "the benefits of the exchange model for managing risks in diverse global markets".

the urban politician · #**144** Posted: **Apr 26, 2008, 2:40 AM**

Nymex seat sale hints CME might need to pay more
By: Ann Saphir April 25, 2008
(Crain’s) — A seat at the New York Mercantile Exchange sold Friday for $640,000, more than what CME Group Inc. has agreed to pay in its planned takeover of the energy market and an indication that investors believe CME may need to raise its offer.

the urban politician · #**145** Posted: **May 12, 2008, 2:23 AM**

Nymex Chief Confident CME Merger Will Get Shareholder Approval

By Arif Sharif and Rebecca McLaughlin-Duane

May 11 (Bloomberg) -- Nymex Holdings Inc. shareholders will approve its planned sale to CME Group Inc. because the transaction has ``great value,'' enough to compensate for a price decline of almost $2 billion, Nymex's Chief Executive Officer James Newsome said.

CME, the world's largest futures exchange, in March agreed to buy Nymex for about $9.3 billion. The deal was valued at $11.2 billion when announced Jan. 28.

Nymex shareholders, upset at the price decline, have forced the exchange to hold a special meeting on June 3 to press for a higher bid. The move followed a petition signed by more than 10 percent of New York-based Nymex's members.

``At the end of the day we will get the 75 percent approval,'' Newsome said in an interview with Bloomberg Television in Dubai today, adding we ``hope to have the deal closed by the end of the year.''

the urban politician · #**146** Posted: **May 14, 2008, 2:46 AM**

This could bode well for CME Group:

UK regulator approves ICE clearing house
By Jeremy Grant in London

Published: May 14 2008 03:00 | Last updated: May 14 2008 03:00

The controversial model of clearing house ownership by futures exchanges received a huge boost in Europe yesterday when UK regulators approved the creation of a London-based clearing house by US-based operator Intercontinental Exchange.

The move signals the biggest shake-up to London's clearing model since the creation of its main clearing house in 1880.

Approval of ICE Clear Europe by the Financial Services Authority signals that London is prepared to see significant changes to its model of "open and competitive" clearing, enshrined in LCH.Clearnet, clearer for the London Stock Exchange and others.

The decision could prompt the LSE to drop LCH as its clearer and develop its own in-house post-trade services, mirroring the model used by rival Deutsche Börse in Frankfurt.

More broadly, it also signals that Europe looks set to follow the US model of clearing arrangements in the futures markets, where exchanges own their own clearing houses in a so-called "vertical silo".

CME bid for Nymex sparks shareholder unrest
Luke Jeffs

13 May 2008
One of the largest attempted US exchange mergers may derail if its terms are not improved, according to shareholders who have attacked the bid after a dip in the buyer's share price drove down the cash and stock offer by $2bn (€1.3bn).

Two New York Mercantile Exchange shareholders have hit out at the proposed takeover of the US energy and metals market by the Chicago Mercantile Exchange, the world’s biggest futures market.

the urban politician · #**147** Posted: **May 16, 2008, 3:49 AM**

Arbs see CME boosting bid for Nymex
Merc stock drop plus rally in oil conspires against big exchange
By Isabelle Clary

Posted: May 14, 2008, 11:27 AM EST

Merger arbitrageurs expect CME Group Inc.’s bid for Nymex Holdings Inc. to succeed, but they also believe the Chicago derivatives powerhouse will have to sweeten its offer for the parent of the New York Mercantile Exchange.

The CME is offering $36 in cash plus 0.1323 of its share for each Nymex share. At the CME closing price of $457.65 on Tuesday, the offer values Nymex at $9.15 billion, barely a 3% premium over Nymex’s $8.89 billion market capitalization.

“It (arbitrage spread) is trading too tight at 3%. Anything below 6% shows speculation the target will get price improvement, get a ‘bump,’ as we say, or close early, and that it (an early close) is unlikely,” a trader at a New York hedge fund specializing in merger arbitrage said, noting that some Nymex shareholders are hoping for the CME to sweeten its offer by $2 billion.

the urban politician · #**148** Posted: **May 19, 2008, 3:28 AM**

A couple days dated but loaded with info:

CME Standing Firm On Offer As Nymex Members Bristle

Tuesday May 13rd, 2008 / 23h10
By Doug Cameron and Gregory Meyer Of DOW JONES NEWSWIRES

Just how badly does CME Group Inc. (CME) want to buy Nymex Holdings Inc. (NMX)?
CME, the world's largest derivatives exchange, is sticking doggedly to the offer first outlined in late January, even as its sagging stock price has cut the value of its bid by more than $2 billion to about $9 billion.
The Chicago exchange, faced with calls from dissident Nymex members for a higher offer and the prospect of a proxy battle, is pushing Nymex executives to promote the deal to its members. The exchanges need to secure support from 75% of the Nymex membership, as well as shareholder and regulatory approval.
CME remains confident that the deal will close by year-end, but has admitted that its purchase of the New York energy and metals trading marketplace is less essential to its future than the $11.6 billion acquisition of the Chicago Board of Trade last year. Also, unlike the CBOT bid process, no competing offer for Nymex has emerged.

the urban politician · #**149** Posted: **May 22, 2008, 2:39 AM**

CME sees no problems financing NYMEX bid
May 21, 2008
(Reuters) — CME Group, the world's largest derivatives exchange, expects no problems financing its planned purchase of NYMEX, company officials said on Wednesday.

"We have received highly confident letters from our bankers. There is absolutely no issue to raising the debt," Jamie Parisi, CME's chief financial officer, said at a Fox-Pitt Kelton conference in New York.

Nowhereman1280 · #**150** Posted: **May 23, 2008, 5:30 AM**

TUP are we the only two people on this forum interested in this fascinating story? I really enjoy the articles you are posting, keep it up!

the urban politician · #**151** Posted: **May 23, 2008, 1:08 PM**

^ Yes, we are.

trvlr70 · #**152** Posted: **May 23, 2008, 1:57 PM**

Quote:

Originally Posted by the urban politician

^ Yes, we are.

Not true. You just do such a good job posting that I rarely get a chance to post something that you've not already alerted us to.

Alliance · #**153** Posted: **May 23, 2008, 4:21 PM**

I read the articles. I just don't know jack about any of this.

Its all really interesting, but I was never one for finance. Obviously I hope it goes through.

Kngkyle · #**154** Posted: **May 23, 2008, 5:10 PM**

I also read the articles, so don't stop.

rgolch · #**155** Posted: **May 24, 2008, 6:23 PM**

Quote:

Originally Posted by Alliance

I read the articles. I just don't know jack about any of this.

Its all really interesting, but I was never one for finance. Obviously I hope it goes through.

I also read everything posted in this thread.

the urban politician · #**156** Posted: **May 29, 2008, 2:24 AM**

Money may mar marriage
Chicago-based CME Group Inc.'s quest to buy a prominent rival may have hit a wall as traders at the New York Mercantile Exchange seek bigger payout
By Joshua Boak | Tribune Reporter
May 28, 2008
The $9.5 billion CME Group bid to acquire the New York Mercantile Exchange hinges on appeasing a group of disgruntled Nymex members who want substantially more money and distrust their current leadership.

These members claim to have enough votes to sidetrack the merger, but they also welcome the opportunity to replace Nymex executives with the team from Chicago-based CME Group.

Mr Roboto · #**157** Posted: **May 29, 2008, 4:33 PM**

Keep posting them, much appreciated!

SolarWind · #**158** Posted: **May 29, 2008, 5:51 PM**

Trader Monthly Magazine -- World's Best Trading Cities

We first asked the question a year ago: If you could trade anywhere, where would you go? Constructing a matrix that combined a robust mix of business and lifestyle criteria in equal measure, Trader Monthly's editors set out to rank 50 of the most trading-oriented cities we could find, examining taxes, time zones, real-estate prices, weather, nightlife and a host of other factors. In our first Best Trading Cities roundup (Trade Here Now! June/July 2007), Chicago, London and New York, not surprisingly, took first, second and third place, respectively.

While those same cities maintained their top slots this year -- indeed, Chicago is soon to be crowned the undisputed futures mecca by virtue of the CME's absorption of the NYMEX -- we did witness a few interesting changes...

http://www.traderdaily.com/magazine/article/18251.html

#1 Chicago
#2 London
#3 New York
#4 Hong Kong
#5 Miami
#6 São Paulo
#7 Los Angeles
#8 Paris
#9 Toronto
#10 Dubai

cbotnyse · #**159** Posted: **May 29, 2008, 7:16 PM**

^^ that is from a few months ago. I remember reading that. That is awesome, but the real money is in NYC (or even Greenwich, CT) no doubt about it.

VivaLFuego · #**160** Posted: **May 29, 2008, 7:48 PM**

^Yeah, except in those place you also pay a 9-10% state income tax, as opposed to 3% here. When you're a trader making the big bucks, that is some serious money.