WCE Holdings Inc. (Holdings), parent of Winnipeg Commodity Exchange Inc. (WCE), WCE Clearing Corporation (WCECC) and Canadian Climate Exchange Inc., has entered into a definitive agreement to be acquired by way of plan of arrangement by IntercontinentalExchange, Inc. (ICE), the leading electronic energy marketplace and soft commodity exchange, for a purchase price of $62.08 per common share or $40 million Cdn. in the aggregate.
WCE was the first North American commodity exchange to transition fully to electronic trading in December 2004. WCE expects to transition trading in WCE's markets to the ICE electronic platform and to transition clearing to ICE Clear USsm within the WCECC regulatory framework by year end. The sale to ICE and the transition to their electronic trading system and clearing system provides a permanent trading and clearing solution for WCE contracts going forward.
"The Board of Directors has determined that the offer from ICE not only provides value to our shareholders, but places the Exchange in the hands of an owner with the financial resources and track record to continue to grow and build on our collective successes," said Lorne DeJaeger, Chairman of WCE Holdings Inc. "WCE and WCECC will continue to operate in Winnipeg as a Canadian based regulated futures exchange and clearing house."
The transaction is subject to customary conditions, including court approval, an affirmative vote of not less than 2/3 of Holdings' shareholders represented in person or by proxy at a special meeting of shareholders called for the purpose, and approval by the Manitoba Securities Commission. The agreement is terminable in certain circumstances, including if Holdings accepts a superior proposal that ICE fails to match and Holdings pays ICE a termination fee of $1.2 million. Upon the close of the transaction Holdings will be a wholly-owned subsidiary of ICE. Holdings expects to close the transaction in the third quarter of 2007.
Holdings received financial advice from Deutsche Bank Securities Inc. and legal advice from Bennett Jones LLP. Holdings' Board of Directors received an independent opinion from Blair Franklin Capital Partners Inc. as to the fairness, from a financial point of view, of the consideration to Holdings' shareholders under the transaction.Winnipeg Commodity Exchange Inc., established in 1887, has been facilitating futures contract trading since 1904. WCE is Canada's only agricultural futures and options exchange and North America's first fully electronic commodity exchange. WCE offers futures and options contracts on canola, domestic feed wheat, and western barley.
