IntercontinentalExchange Group Inc.
), or ICE Group, has drafted its plan of action to deal with
Euronext NV platform, which was part of the NYSE Euronext
acquisition in Nov 2013. The company has scheduled an initial
public offering (IPO) for Euronext by Jun 2014-end. However, the
details of shares and pricing remain undisclosed.
Before the IPO, a 33% interest in Euronext will be divested to a
consortium of ten investors, which include, Banco Espirito Santo
SA, BNP Paribas SA, ABN Amro Group NV, Societe Generale SA and
Euroclear SA/NV. These investors will be required to hold their
stakes for at least 3 years, post the offering.
Following this development, the IPO will likely to be executed
in a two-part offering. In the initial tranche, the institutional
and retail investors in the Netherlands, France, Belgium and
Portugal will be involved through a secondary sale. The remaining
shares will then be offered to institutional investors in other
jurisdictions, including that of the U.S., through private
The pan-European Euronext platform owns the equity, fixed income
and derivatives exchanges in Paris, Amsterdam and Brussels, where
it will likely be listed initially. ICE Group further plans to list
Euronext in Lisbon exchange, also owned by Euronext, by the end of
These four exchanges are expected to enhance, trading activity
and operational transparency, while creating new demand for various
capital sources from the economic recovery in Europe. In Jan 2014,
Euronext was valued within $2.1−2.5 billion.
We believe the IPO and part-sale of Euronext will further boost
operating leverage, cost synergies and liquidity. ICE Group plans
to utilize the proceeds from the disposition of Euronext to
de-leverage its balance sheet.
Alongside, the decision to spin-off Euronext was backed by
regulatory concerns in Europe regarding antitrust issues.
Previously, ICE Group was also to retain 25% stake in Euronext for
2 years after the IPO, except if it can pool in more long-term
investors. Nevertheless, ICE Group aims to exit the Euronext
business completely in the future.
Currently, ICE Group has a Zacks Rank #3 (Hold). Some
better-ranked financial stocks include
Ladder Capital Corp.
HCI Group Inc.
Hallmark Financial Services Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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HALLMARK FINL (HALL): Free Stock Analysis
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INTERCONTNTLEXC (ICE): Free Stock Analysis
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