ICE talks with regulators on Euronext IPO near end

Deal must still pass European antitrust check

Handshake, deal Handshake, deal

Intercontinental Exchange Inc.’s talks with regulators about spinning off four European bourses owned by NYSE Euronext are nearing completion, according to Chief Executive Officer Jeff Sprecher.

Discussions with domestic regulators about the venues in Paris, Amsterdam, Brussels and Lisbon are “coming quickly to a conclusion,” Sprecher said in a presentation at the annual Futures Industry Association conference today in Boca Raton, Florida. The Atlanta-based market operator must still submit the $8.2 billion deal to acquire NYSE Euronext to antitrust officials in Europe, he said.

An initial public offering of the Euronext stock markets would include related equity derivatives and commodities futures traded on the exchanges, Sprecher said. NYSE Euronext acquired the bourses when NYSE Group Inc., owner of the New York Stock Exchange, combined with Euronext NV in 2007.

The group of four exchanges should be a “standalone, very continental business” to benefit European capital markets, Sprecher told attendees at the conference. “It can be the first mover in what I think should be continuing consolidation or joint ventures or some kind of federation or loose amalgamation of exchanges.”

Buying NYSE Euronext, which owns the London-based Liffe futures venue, will bring interest-rate futures to ICE, which has roots in the commodities and over-the-counter energy markets, and will boost its business, Sprecher said.

Asset Classes

“Owning NYSE Euronext brings us into financial markets in a much bigger way,” he said. The company wants to operate in new asset classes and would like to have a “multi-asset-class clearing infrastructure,” he said.

Sprecher, who has been critical of U.S. equities market structure and the fragmentation of trading across more than 50 venues including exchanges, electronic communications networks and broker-run dark pools, said he’s hoping for the “pendulum to come back” toward a more unified market.

The company won’t decide on cost-cutting measures or changes at the technologies business at NYSE Euronext until it receives European regulatory approval for the deal, Sprecher said. Personnel decisions will also be made then, he said.

“The New York Stock Exchange is an unbelievable business,” he told reporters at the conference. “There’s a really good business there that’s been hard to see inside the way it’s currently organized. Hopefully as a bigger group we’ll be able to put more transparency on it and organize it in a way that you’ll be able to see the value of that franchise, which I think is high.”

More IPOs

ICE may seek to use NYSE, which lists the most companies globally by market capitalization, to encourage more firms to go public following the financial crisis that started in 2007, Sprecher said. NYSE can help change the view of technology companies that may be reluctant to bring their firms public, he said. ICE went public in 2005 on the Big Board.

“I got to push the button and ring the bell,” Sprecher said. “It was one of the highlights of my career. To go from nothing to standing there and taking a company public was an unbelievable life experience, unbelievably powerful for a company. It gave us a currency.”

Bloomberg News

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