May 4, 2011 / 11:57 AM / 7 years ago

UPDATE 5-ICE CEO blasts NYSE's board, woos shareholders

* ICE, Nasdaq to take $11.2 bln bid to NYSE shareholders

* Questions over conditions on hostile bid plan

* ICE CEO says could find more cost savings in NYSE deal

* ICE core EPS $1.77 in Q1 vs Wall St expectation of $1.69 (Adds details on vote date, shareholders)

By Jonathan Spicer

NEW YORK, May 4 (Reuters) - IntercontinentalExchange Inc (ICE.N) CEO Jeffrey Sprecher, whose takeover bid was twice spurned by NYSE Euronext NYX.N, said its directors have now handed over the fate of the Big Board to shareholders.

In a feisty defense of his joint offer with Nasdaq OMX Group (NDAQ.O), the chief executive said on Wednesday that NYSE’s board is “the only obstacle to NYSE shareholders receiving a better deal,” adding he is not making the unsolicited bid simply to be the “spoiler.”

Shareholders are centerstage in a bitter takeover battle in which ICE and Nasdaq are seeking to wrest control of the Big Board parent from Germany’s Deutsche Boerse AG (DB1Gn.DE), which in February agreed to acquire it in a friendly deal.

NYSE’s board twice rejected the $11.2 billion ICE/Nasdaq bid, citing risks that regulators would block it, arguing it runs against company strategy, and backing the $9.8 billion Deutsche Boerse tie-up that would create the world’s largest market operator.

Sprecher, whose company reported a stronger-than-expected 26 percent profit rise on Wednesday, said ICE and Nasdaq decided to take their offer straight to investors to give them the “unfiltered” details. [ID:nN02238254]

“I would suspect that the board would get very realistic when it sees a vast majority of shareholders not supporting the board’s deal, and supporting another deal,” said the CEO, a shrewd dealmaker over the last decade, on a conference call with analysts and reporters.

“At the end of the day, NYSE shareholders will decide the future of NYSE Euronext,” Sprecher said, adding: “I think ultimately it will work out just fine.”

ICE’s stock fell 2.5 percent to $113.59 in afternoon trading in New York amid a broad tumble in exchange operators, and the overall market.


ICE and Nasdaq said on Monday they plan to go hostile with a tender offer later this month, but several key conditions require that NYSE’s board agrees to waive an ownership and voting cap, seriously threatening to derail the plan.

That puts ICE and Nasdaq at the mercy of NYSE shareholders, who vote on the Deutsche Boerse plan July 7, and who in the last few weeks have called on NYSE to at least talk to the pair. [ID:nN27170727] [ID:nLDE73R15U]

“The board has to approve anything in this transaction, so they cannot go hostile,” said Diego Perfumo, analyst at Equity Research Desk. “The reason they’re doing this is that it puts a lot of pressure on the board, from the shareholders.”

Under the unsolicited deal, ICE would buy NYSE Euronext’s derivatives business while Nasdaq would get its stock, options and technology businesses.

Sprecher, noting that May 4 is the deadline for investors to buy NYSE Euronext stock in order to vote July 7, said ICE and Nasdaq could possibly find more cost savings if they were given access to the company’s detailed financial books.

The pair’s success will hinge in part on convincing so-called merger arbitrage investors, or arbs, to vote down the Deutsche Boerse plan and hang on to NYSE stock for up to another year.

Also on Wednesday, Deutsche Boerse formally launched the tender period for its shareholders to get shares in Alpha Beta Netherlands Holding NV, a holding company for the combined company with NYSE Euronext. [ID:nLDE7430B8]


ICE’s first-quarter earnings, meanwhile, rose on the back of hot energy futures trading. Revenue jumped 18 percent in the period that included unrest in oil-rich North Africa and the earthquake and tsunami in Japan, due to higher Brent and WTI trading.

ICE earned $130.2 million, or $1.74 per share, in the first quarter, up from $103.5 million, or $1.36 per share, a year earlier.

Excluding one-time items, the profit was $1.77 per share, better than the $1.69 expected on average by analysts, according to Thomson Reuters I/B/E/S. Revenue was $334.3 million, compared with the $329.6 million expectation.

Revenue from the trading and clearing of futures rose 28 percent from last year. Revenues from ICE’s 2-year-old credit derivatives clearing business was $13 million, which, if continued, would fall short of 2011 projections. (Reporting by Jonathan Spicer; Editing by Maureen Bavdek, Dave Zimmerman and Tim Dobbyn)

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