This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The Deal: ICE-NYSE Unexpected Merger Success

Stocks in this article: NYXICECME

Portales Partners analyst Paul Gulberg said the deal was on track and would be earnings accretive for ICE, noting NYSE's derivatives Liffe platform would have been the primary asset of interest. "U.S. equity markets are extremely commoditized but ICE has said they'd consider listing or selling the cash equity business," he said.

UBS research analyst Alex Kramm said ICE's stock outperformance reflected greater confidence that synergy targets would be met. "ICE remains our favorite idea in the exchange subsector and we expect the stock to move higher as investors give more credit to the significant earnings accretion expected from the deal," he told clients.

ICE chief executive and chairman Jeff Sprecher said Tuesday on a conference call discussing the exchange's second-quarter earnings that since receiving antitrust approvals, the group had exchanged information far more closely with NYSE Euronext, giving the acquirer renewed confidence that projected cost savings would be realized.

ICE reported second-quarter net income of $153.3 million, or $2.09 per share, up 7% from net income of $143.2 million, or $1.95 per share.

Sprecher said both companies had discussed the organization of a global equity index business. "A meaningful group of equity indices on a common platform are likely to drive growth," he said.

Hintz said the expected spinoff or disposal of the Euronext cash equity business as part of the deal would reduce the new company's reliance on cash equity trading to around 5%. Once completed, this would make the economics of the deal clearer, with ICE then able to lower its average cost per trade through higher volumes and the removal of back-office costs, he said.

The combined ICE-NYSE Euronext would be the third-largest exchange globally behind Hong Kong Exchanges and Clearing and CME Group (CME).

NYSE was recently appointed the administrator of Libor, a key benchmark rate that has been tarred by several rate-rigging scandals and was once symbolic of London's rise as a global financial center.

Written by Jane Searle.

2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,195.42 +221.11 1.30%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,566.1380 +16.9120 0.37%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs