Leo Melamed, chairman emeritus of the Chicago Mercantile Exchange, was perhaps the only member of its leadership team unconcerned with sniping from rivals over the past two years that “the CME couldn’t do a deal”.
Armed with the financial firepower from its 2003 flotation and soaring revenues as asset managers turned to futures and options for risk management and speculation, the “father of futures” was fixed on combining Chicago’s two largest derivatives exchanges.
That strategy faced potential ruin on Thursday as CME advisers – preoccupied with fighting regulatory opposition to a CBOT merger Mr Melamed had worked 30 years towards – engaged in fire-fighting to preserve the proposal. The CME insisted its merger was on track, while CBOT officials kept silent after what Jeff Sprecher, ICE chief executive, described as a “cordial” reception to his offer.
CME officials had insisted they could be forced to look overseas if opponents blocked the CBOT merger, though Deutsche Börse or its Eurex unit remain the only viable alternatives.
The CME is left with the option of sweetening its existing offer, but its room to boost the cash component is limited by the desire of CBOT investors to retain shares to garner any potential benefit from any interlinked rights to participate in a float of the Chicago Board Options Exchange.
The Merc could also seek to highlight the oversight of the main ICE futures unit by UK regulators and tensions over the competitiveness of US capital markets.