The Intercontinental Exchange, a U.S-based group that owns 11 stock and securities markets around the world, said Tuesday it may make a counter offer for the London Stock Exchange, which could upend Deutsche Börse’s bid to become one of the world’s top three stock exchanges.
The Chicago Mercantile Exchange, the world’s largest trading platform by market value, is also looking whether it could challenge the Deutsche Börse-LSE deal, people familiar with the matter told news agency Bloomberg. A counterbid for LSE is the most likely option but the Chicago-based exchange may choose not to proceed, Bloomberg reported. CME declined to comment.
Shares of LSE jumped to an all-time high Tuesday, up more than 8 percent to 29.08 pounds, or $40.49, at 2:36 pm London time, after news the ICE, the owner of the New York Stock Exchange, confirmed it was considering a bid.
Deutsche Börse shares gave all their gains from earlier in the day after news of the rival bids broke. The stock was the only decliner in the German blue-chip DAX index, falling 0.2 percent at €76.03 in Frankfurt.
“(The) ICE counter bid for LSE could have very strong chances,” Diego Perfumo, an analyst with Equity Research Desk in London, said in an email to Handelsblatt Global Edition.
Banks would prefer ICE to buy LSE based on previous deals the U.S. exchange operator has made, Mr. Perfumo said. Furthermore, a takeover price of 30 pounds per LSE share, or $14.7 billion in total, could still boost ICE’s 2016 earnings per share by 6.7 percent, if the deal were funded by a share and debt issue, the analyst said.
Last week, Deutsche Börse and LSE announced plans to merge their operations via an all-share transaction that would make it the world’s number two or three trading platform after Chicago-based CME Group and ICE. It marks the third time in the last 16 years that the two exchanges have tried to merge.