February 6, 2020 / 1:14 PM / 2 months ago

Intercontinental Exchange abandons deal talks with eBay

(Reuters) - New York Stock Exchange owner Intercontinental Exchange Inc (ICE) (ICE.N) said it had decided to stop exploring deal options with eBay Inc (EBAY.O), just hours after its chief executive said he would “love” to speak with the e-commerce company.

FILE PHOTO: A screen displays the ticker symbol and logo for Intercontinental Exchange Inc. (ICE) on the floor of the New York Stock Exchange (NYSE) March 1, 2016. REUTERS/Brendan McDermid

ICE’s shares, which fell as much as 6.5% during regular trading on Thursday, were up nearly 3% after the bell, following the news, while eBay’s stock fell nearly 7%.

ICE confirmed on Tuesday it had approached eBay to explore “a range of potential opportunities,” following reports it had mulled a more than $30 billion takeover of the online marketplace, but that eBay was unresponsive.

“I didn’t think it’s particularly shocking and outrageous,” Chief Executive Officer Jeffrey Sprecher told analysts on a post-earnings call.

Analysts had questioned how ICE, which also runs futures exchanges and clearinghouses, and provides financial data, would absorb the e-commerce company.

Sprecher said he first reached out to eBay around 20 years ago when ICE was launching as a place to match buyers and sellers of electric power, and that then-CEO Meg Whitman advised him on building an online marketplace. He said eBay was one of dozens of companies ICE has continued to share ideas with.

In recent years, ICE has made acquisitions that have helped it expand beyond its traditional transactional revenue model, to more stable subscription-based revenues, leveraging data and expanding into areas such as electronic mortgage registrations, rewards points, and a market for purchases in video games.

“We know the lane that creates value for us,” Sprecher said. “And so when we think about, is there a marketplace for airline miles or swords and sickles that are on a video game, we’re not crazy. We didn’t lose our minds. We know what our platform does and we know how to lever it.”

The Atlanta-based company said its fourth-quarter profit fell 27%, mainly due to lower revenue from its transaction and clearing business, as market volatility declined.

Quarterly net income fell to $448 million, or 80 cents per share, from $611 million, or $1.07 per share, a year earlier. Discarding one-time items, like merger and acquisition costs, ICE earned 95 cents per share, meeting analysts’ estimates.

Reporting by C Nivedita and Arunima Kumar in Bengaluru and John McCrank in New York; Editing by Saumyadeb Chakrabarty, Arun Koyyur, Jonathan Oatis and Shinjini Ganguli

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