ICE con­firms it may bid for LSE group

The Pak Banker - - 6BUSINESS -

In­ter­con­ti­nen­tal Ex­change Inc. said it is con­sid­er­ing mak­ing an of­fer for Lon­don Stock Ex­change Group Plc, a week af­ter Deutsche Bo­erse AG said it was in merger talks with the U.K. com­pany.

ICE said in a state­ment that it hasn't taken a fi­nal de­ci­sion on whether to make an of­fer, nor has it ap­proached LSE's board about do­ing a deal. The an­nounce­ment pro­pelled LSE's shares to a record high, up 8 per­cent as of 8:50 a.m. in Lon­don.

"There can be no cer­tainty that any of­fer will be made, nor as to the terms on which any of­fer will be made," ICE said in the state­ment.

ICE, which is based in At­lanta and owns the New York Stock Ex­change, is work­ing with ad­vis­ers in­clud­ing Mor­gan Stan­ley to pre­pare a pos­si­ble higher of­fer for LSE, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter, who asked not to be iden­ti­fied be­cause talks are pri­vate.

While the U.S. firm is aware it may face political and cor­po­rate push­back if it tries to break up the Euro­pean mar­riage, ICE has con­cluded that LSE share­hold­ers can be per­suaded by a higher of­fer, the peo­ple said. At the least, a coun­ter­bid could force Deutsche Bo­erse to in­crease its of­fer, one of the peo­ple said.

CME Group Inc. is also work­ing with ad­vis­ers to as­sess whether it could chal­lenge the deal, sep­a­rate peo­ple fa­mil­iar with the mat­ter said.

While a coun­ter­bid for LSE is the most likely op­tion that CME is study­ing, dis­cus­sions are at an early stage and the Chicagob­ased ex­change may choose not to pro­ceed, they said. ICE is un­likely to make a move be­fore the March 22 U.K. takeover dead- line for Deutsche Bo­erse to make a for­mal of­fer for LSE, one of the peo­ple said.

Rep­re­sen­ta­tives LSE, Mor­gan Stan­ley and CME de­clined to com­ment. A rep­re­sen­ta­tive for Deutsche Bo­erse didn't im­me­di­ately re­spond to re­quests for com­ment.

The ex­change busi­ness is rife with ac­qui­si­tions. ICE, led by Chief Ex­ec­u­tive Of­fi­cer Jeff Sprecher, be­came a global pow­er­house in part through its deal­mak­ing, such as the 2013 pur­chase of NYSE Euronext, which gave it a de­riv­a­tives busi­ness called Liffe. And in Oc­to­ber, Sprecher ex­panded its data-ser­vices busi­ness with the $5.2 bil­lion ac­qui­si­tion of In­ter­ac­tive Data Hold­ings Corp. ICE also is no stranger to un­so­licited of­fers for com­peti­tors. In 2007, the Chicago Mer­can­tile Ex­change pre­vailed in its quest to buy the Chicago Board of Trade over an un­so­licited $11.8 bil­lion of­fer from ICE.

Kelly Lo­ef­fler, an In­ter­con­ti­nen­tal ex­ec­u­tive and Sprecher's wife, paid a bell­boy at the Boca Raton Re­sort & Club to slip the CBOT pro­posal un­der the doors of Charles Carey and Bernard Dan, the chair­man and CEO of CBOT, at 6:45 a.m. that morn­ing, a per­son with di­rect knowl­edge of the mat­ter said in 2012. The ICE coun­terof­fer forced the Chicago Merc to im­prove its bid three times.

Deutsche Bo­erse and LSE last week an­nounced plans to com­bine and cre­ate a global player worth at least 20 bil­lion pounds ($28 bil­lion), which could bet­ter com­pete with ICE as well as CME Group Inc., the world's largest de­riv­a­tives mar­ket. A Ger­man-Bri­tish merger could also give cus­tomers a one-stop shop for pri­mary mar­kets in Lon­don, Frank­furt and Mi­lan, as well as ac­cess to a pan-Euro­pean stock venue called Turquoise.

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