NEW YORK (TheStreet) -- Many shareholders of NYSE Euronext (NYX) were thrilled when IntercontinentalExchange (ICE) made a takeover bid on Dec. 21, 2012, for cash and stock totaling $8.2 billion that was later accepted by NYX.Since that point, NYX shares hit a zenith of $38.75; the company continues to pay a $1.20 per year dividend and shares of ICE stay nicely frozen, just $5 below their 52-week high of $158.18. Yet some have screamed monopoly and have insinuated that the merger of the two exchange giants would be a violation of certain antitrust regulations. The loudest objections may be coming from Europe. The European Commission said on Tuesday that it will review plans by ICE to acquire NYX after national regulators chose not to object to the EU taking the leadership of the investigation. A spokesperson for the EU's Brussels-based antitrust authority, Antoine Colombani, announced that the EU now has jurisdiction over the deal. Of interest is the fact that neither ICE nor NYX has formally notified the EU about ICE's intentions to take over NYX. Last month, ICE claimed that it sought an EU review of its acquisition to avoid separate probes in the U.K., Spain and Portugal. The fact that the EU is taking the lead on the antitrust implications of the deal may expedite the process and preclude EU member nations from objecting or interfering.
NYX shareholders have long awaited a stimulus to lift the share price after EU regulators blocked Deutsche Bourse's attempted acquisition of the NYSE in 2012. The EU's decision to block the purchase then was based on concerns that a dearth of competition in derivatives and clearing would result if the merger were allowed. What is this company I affectionately refer to as "The Iceman," which calls to mind the classic play The Iceman Cometh by Eugene O'Neill? ICE operates regulated global markets and clearinghouses primarily in the U.S., the U.K. Canada, and Brazil. Founded in 2000 and headquartered in Atlanta, it provides futures exchange, over-the-counter market, derivatives clearinghouse and post-trade services for trading and clearing a range of contracts. The contracts are based on such commodities as crude and refined oil, natural gas, power, coal, emissions, sugar, cotton, coffee, cocoa, canola, frozen concentrated orange juice, credit default swaps, currencies and equity indices.
Sales growth and revenue are estimated to come in at around $347.8 million, which would be almost a 5% decrease from the year-ago quarter. You can learn more about the company and read its latest letter to shareholders that claims, "... With an entrepreneurial culture, we focus on serving our customers through innovation while seeking to deliver best in class growth and returns for our shareholders." Below is a five-year chart that illustrates the efficacy of that statement. ICE data by YCharts
After the crash of late 2008 and early 2009, ICE turned on the afterburners when it came to its trailing 12-month EBITDA. ICE doesn't pay a dividend, but it offers an attractive five-year expected price-to-earnings-to-growth ratio of 1.43. If the NYX deal goes through, there should be plenty of growth going forward when it comes to EPS and revenue. At the end of 2012, ICE had a powerful trailing 12-month operating margin of almost 63% and an impressive profit margin of more than 40%. By the end of 2012, its total cash was $1.61 billion, more than its total debt of $1.13 billion. NYX's five-year chart is less impressive -- more in line with a share price that couldn't take off until it became a takeover target. NYX data by YCharts