BEIJING, March 26 -- The Chicago Mercantile Exchange has "no reason" to raise its bid for the Chicago Board of Trade in response to a higher offer from Intercontinental Exchange Inc, the head of the CME has said.

Craig Donohue, chief executive officer of Chicago Mercantile Exchange Holdings Inc, is counting on CBOT Holdings Inc shareholders to reject Intercontinental's offer, which is about US$1 billion higher than the CME's. His reasons range from synergies created by the merger to hometown loyalty.

"We think the board of directors of the Chicago Board of Trade will be looking at that proposal carefully to try to understand whether, in fact, it's a better offer," Donohue said in an interview. "We think it's an inferior offer and I'm confident they will agree with us."

Intercontinental last week offered 1.42 shares for each CBOT share, valuing the company at US$9.6 billion. The CME offer, which dates from October, is for 0.3006 share for each CBOT share, worth 8.6 billion U.S. dollars.

Donohue met on Thursday with CBOT shareholders, some of whom called on the Chicago Merc to raise its bid. The directors of the CBOT agreed last week to meet and exchange information with Intercontinental management and postponed a scheduled April 4 vote on the CME's offer.

Donohue said Intercontinental's offer won't achieve the merger-related savings that they will need to make the buyout work and it may take longer to execute. CME has had six months to analyze synergies and has no competing asset classes, he said.

"Their 240 million dollars in synergies are not realizable," Donohue said.

He expects the CBOT to accept his offer as it stands and to complete the transaction by the middle of this year.

"They'll have to budge, the deal won't pass as is," said Larry Dorf, a CBOT member for 25 years.

Growing volumes and cost cutting at the exchange have added value that is not reflected in the CME's offer, he said. "We are now worth a lot more than previously negotiated."