Shares of ICE ticked higher after the firm lost a bidding war for the London Metal Exchange (LME). Hong Kong Exchanges, said it has been approved as the preferred bidder for the LME, a $2.2 billion tie up that bolsters its reach and better positions the combined entity to tap China’s growing appetite for commodities. LME shareholders are expected to vote on the deal by July, with a 75% approval vote needed to cement the deal.
Now that ICE is not making the acquisition, investors are hopeful that it may mean a buyback or special dividend. The company had about $1 billion in cash on its balance sheet at the first quarter's end, as it was stockpiling money in anticipation of the LME deal possibly going through.
However, one analyst noted that ICE management may prefer to allocate more of its excess capital to acquisitions and organic growth than to buybacks or dividends.
IntercontinentalExchange (ICE : NYSE : US$134.94), Net Change: 6.15, % Change: 4.78%, Volume: 1,174,058