Champagne on ICE

4 May 2016 By George Hay Follow @gfhay

The UK exchange’s shares dived after U.S. rival ICE said it wouldn’t submit a bid. Investors weren’t giving an LSE-Deutsche merger much credit for potential revenue synergies as it was. Now, fear a deal could get blocked may be prevailing over value creation from cost savings.

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U.S. exchange and clearing house operator Intercontinental Exchange said on May 4 it did not intend to make a rival offer to challenge London Stock Exchange Group’s offer from German peer Deutsche Boerse.

ICE said that following due diligence on the information made available, it had determined that there was insufficient engagement to confirm the potential market and shareholder benefits of a strategic combination.

LSEG’s shares fell as much 10 percent following ICE’s statement, whilst Deutsche Boerse rose 5.2 percent.

LSEG declined to comment.

The U.S. exchange’s statement came a day before its deadline to submit a plan to British regulators assuring them that its recent takeover of commodities trading software house Trayport will not be anti-competitive.

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