ICE may have more time to consider bid for London bourse

Mon May 2, 2016 1:13am EDT
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A combined ICE-LSEG group would have operations in continental Europe and London to ease the impact of a Brexit. LSEG owns Borsa Italiana in Milan and LCH.Clearnet, a clearing house based in Paris and London.

However, to get round possible competition concerns and sweeten France, ICE could offload Borsa Italiana and the French Clearnet half of LCH.Clearnet to Paris-based exchange Euronext, TABB's Daniels said.

Proceeds from such sales would also help ICE pay down debt while still leaving a combined LSEG-ICE Group with ICE's existing euro zone trading and clearing operation in the Netherlands.

Others are more skeptical that this would be enough.

"ICE faces the same antitrust concerns as Deutsche Boerse, which I feel are insurmountable when it comes to clearing in European derivatives," said Patrick Young, publisher of industry daily Exchange Invest.

Under a Brexit, the European Central Bank would be expected to put pressure on market participants to shift euro-denominated trading and clearing, currently a major chunk of London's business, to the single currency area.

ICE's euro zone based operations are seen as too small and specialist for now to handle such large volumes in a short period.

Deutsche Boerse has said its deal is Brexit-proof, though some analysts doubt any deal can be and question whether the German exchange's shareholders would fall in line if Britain left the EU.

"If Brexit happened, that would likely prove a major issue and most likely a deal-breaker for both deals," a banker close to exchanges said.

(Additional reporting by John McCrank in New York and Anjuli Davies in London; editing by Janet McBride)

A screen displays the ticker symbol and trading information for Intercontinental Exchange Inc. (ICE) at the post where it is traded on the floor of the New York Stock Exchange (NYSE) March 1, 2016. REUTERS/Brendan McDermid