.jpg)
CME Group, the world's largest and most diverse exchange, announced today that 159 Chicago Board Options Exchange (CBOE) exercise right privileges (ERP) were tendered to the company by members of the Chicago Board of Trade at $250,000 each. The aggregate price for the ERPs is $39.75 million, which will be paid by the company on September 26. As the holder of 159 ERPs, representing 12 percent of the 1,331 outstanding, CME Group is the single largest ERP holder.
Through the merger agreement, the remaining ERP holders retain the right to continue as a class member in the CBOE lawsuit with all of its substantial upside recovery potential and a guarantee, even if the lawsuit is lost or settled, of up to a $250,000 payment. CME Group, which was created July 13 with the merger of the CME and the Chicago Board of Trade, earlier this year also removed a previous $15 million cap on the exercise right legal defense expenses.
"We are committed to pursuing a favorable outcome for CBOE exercise rights holders. At the same time, we are pleased to offer flexibility to those CBOT members who wanted to cash out immediately," said CME Executive Chairman Terry Duffy. "The remaining ERP holders are now in a win-win position. Not only are they guaranteed $250,000, but they also are included in the potential right to share equally with the CBOE regular members in any CBOE demutualization."
"We remain confident that CME Group will prevail in obtaining a favorable outcome, whether through litigation or settlement, in receiving full participation in a CBOE demutualization," said CME Chief Executive Office Craig Donohue. "As the largest ERP holder, CME Group now has a significant economic interest in vigorously pursuing the litigation to maximize the recovery from the Chicago Board Options Exchange."
Created in 1973 with the start of the CBOE, exercise right privileges allow qualified holders trading privileges and equity in the CBOE.
CME Group (http://www.cmegroup.com) is the world's largest and most diverse exchange. Formed by the 2007 merger of the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT), CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on its trading floors. CME Group offers the widest range of benchmark products available across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, agricultural commodities, and alternative investment products such as weather and real estate. CME Group is traded on the New York Stock Exchange and NASDAQ under the symbol "CME."
