ICE in pact with Chicago options exchange: report

NEW YORK Wed May 30, 2007 7:41am EDT

Traders in the Corn futures pit of the Chicago Board of Trade signal orders shortly after the opening bell, March 30, 2007. IntercontinentalExchange Inc. may have helped its bid for CBOT Holdings by reaching an agreement aimed at resolving a dispute between CBOT and the Chicago Board Options Exchange, The Wall Street Journal reported on its Web site on Wednesday. REUTERS/Frank Polich

Traders in the Corn futures pit of the Chicago Board of Trade signal orders shortly after the opening bell, March 30, 2007. IntercontinentalExchange Inc. may have helped its bid for CBOT Holdings by reaching an agreement aimed at resolving a dispute between CBOT and the Chicago Board Options Exchange, The Wall Street Journal reported on its Web site on Wednesday.

Credit: Reuters/Frank Polich

NEW YORK (Reuters) - IntercontinentalExchange Inc. (ICE.N) may have helped its bid for CBOT Holdings BOT.N by reaching an agreement aimed at resolving a dispute between CBOT and the Chicago Board Options Exchange, The Wall Street Journal reported on its Web site on Wednesday.

ICE, the upstart energy exchange, is vying with Chicago Mercantile Holdings Inc. CME.N, the largest U.S. futures mart, to buy CBOT Holdings, the parent of Chicago Board of Trade.

CBOT has been battling with the CBOE over exercise rights that date back to the creation of the options exchange by CBOT in 1973. The rights allow CBOT full members to trade options at the neighboring CBOE without having to buy a membership.

CBOE has requested that these rights be terminated if CBOT is taken over. CBOT has vowed to protect the rights.

ICE and CBOE would offer to settle the dispute by paying the CBOT members in question $500,000 each, the Wall Street Journal said, citing unnamed sources.

The new agreement, valued at about $665 million, is expected to be announced as soon as Wednesday and would only happen if the CBOT becomes part of ICE, the paper said. ICE and the options exchange were not immediately available for comment.

CBOT's board on May 11 endorsed terms of a sweetened offer from CME. That offer valued CBOT at about $9.2 billion, or 16 percent higher than CME's original proposal made in October.

Atlanta-based ICE announced its rival plan for CBOT in mid-March, throwing a wrench into the works of the plan to create the world's largest derivatives exchange.

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