International Securities Exchange Holdings Inc
International Securities Exchange — Merger or Acquisition (May 2007)
17 slides from International Securities Exchange's merger presentation, May 1, 2007
Slide 1: Strategic Rationale
Strategic Rationale Creates largest transatlantic derivatives marketplace with 545 exchange members and more than 2.1 billion contracts traded Complementary product coverage creates global leader in 3 product categories which account for 67% of global exchange traded derivatives Combines two innovat
Slide 2: Key transaction terms
Terms: USD 67.50 per share in cash Purchase Price: USD ~2.8 billion Financing: Cash and debt Approvals: Customary shareholder and regulatory approvals Voting requirements Simple majority (50% + 1 share) Management structure ISE’s full management intends to remain in their positions Deal protection U
Slide 3: Two leading exchange organizations joining forces
Two leading exchange organizations joining forces Eurex ISE Global market leader in long- term fixed income and index derivatives Pre-eminent market for EUR denominated equity options World’s first fully electronic derivatives exchange platform Built international distribution through remote members
Slide 4: ISE has pioneered electronic trading in the fast growing US equity derivatives market
32% CAGR 40% ISE has pioneered electronic trading in the fast growing US equity derivatives market US equity options market, number of contracts traded, millions PHLX PCX ISE AMEX CBOE BOX Market share US equity options in 2006 US equity options market (CAGR 27%) has significantly outgrown US cash e
Slide 5: Eurex has become the world’s largest derivatives market
Eurex has become the world’s largest derivatives market since its inception in 1998 Home of European interest rate benchmark (Bund-Future) and European equity market benchmark (STOXX indices) Fully electronic trading from inception (no floor operations) Pioneered remote membership in the 1990s (< 20
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Slide 9: Combination creates global leader in main product categories
Combination creates global leader in 3 main product categories which account for 67% of global exchange derivatives market Long-term interest rate derivatives Eurex/ ISE CBOE Bovespa Eurex/ ISE CME CBOE Eurex/ ISE CBOT Sydney FE Eurex ISE Contracts in million (2006) Equity index derivatives Individu
Slide 10: Eurex invests into a high growth business and strengthens its balanced portfolio
Eurex invests into a high growth business and strengthens its balanced portfolio Equity Index products Individual Equity options Fixed income derivatives Other Eurex/ ISE: Number of traded contracts by product category 100% = 2,119 million contracts traded Compound Annual Growth Rate 2002-2006 US Eq
Slide 11: Combine Eurex and ISE networks
Combine Eurex and ISE networks 2007 Eurex / ISE Further extends global distribution network Two innovation leaders join forces Eurex - World’s first fully electronic derivatives exchange platform Eurex – Introduces remote membership and clearing ISE – F irst fully electronic US options exchange plat
Slide 12: Further extension of global product suite
Post 2007 Further extension of global product suite Credit Derivatives Segment Asia-based products USD denominated Single Stock Futures 2007 Focus on achieving global product suite Launch of Credit Derivatives Eurex/ISE Extension of product suite to US equity options Direct distribution of European
Slide 13: Eurex/ISE in combination with Deutsche Börse well positioned to attract international partners
SWX Eurex/ISE in combination with Deutsche Börse are well positioned to attract international partners Strong existing global network of partners and expanding geographic presence * CDC: China Government Securities Depository Trust & Clearing Co., Ltd. ** CFETS: China Foreign Exchange Trade System &
Slide 14: Run-rate synergies of ~$50m and additional synergy potential
~ USD 35 million ~ USD 15 million Additional synergy potential Run-rate synergies of ~$50m and additional synergy potential from joint product innovation Distribute Eurex equity index products into ISE distribution network Distribute US equity options into Eurex distribution network Increase efficie
Slide 15: Acquisition financing structured to optimize Deutsche Börse’s capital structure
Initial financing Long term financing Impact on Capital Management Program Acquisition financing structured to optimize Deutsche Börse’s capital structure Acquisition will initially be financed through bridge loan facility of approx. €1.5bn (=USD 2bn) and cash on hand at the time of closing Bridge l
Slide 16: Straightforward transaction implementation
Principal structure Deal protection Remaining steps to completion Straightforward transaction implementation This acquisition is structured as a merger as it is customary in the US ISE is merged with a U.S. subsidiary of Eurex ISE “Board of Directors” recommends the transaction to shareholders A bre
Slide 17: Legal Disclaimer
Legal Disclaimer Proxy Statement ISE plans to file with the SEC and mail to its stockholders a Proxy Statement in connection with a special meeting of stockholders to be called to approve the merger. The Proxy Statement will contain important information about ISE, the transaction and related matter
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