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London Calling? ICE's Sprecher eyes options

Wed, 02nd Mar 2016 05:01

By John McCrank

NEW YORK, March 2 (Reuters) - Jeffrey Sprecher has definedhis career by buying up rivals of Intercontinental Exchange Inc,the company he founded as an upstart in 2000. Now he is at itagain.

This week, ICE said it was eyeing a bid for LSE-Group,potentially thwarting an offer for the London Stock Exchangeowner by Germany-based Deutsche Boerse. The move would be one ofa string of blockbuster deals for ICE, including a $8.2 billionacquisition of the bastion of American capitalism - the New YorkStock Exchange - in 2012. ICE had gone public on the NYSE in2005.

"He's been a visionary in the exchange world and aconsummate deal maker," said Rich Repetto, an analyst at SandlerO'Neill.

Sprecher, a Wisconsin-born chemical engineer by training,founded ICE in 2000 in Atlanta, Georgia, with the goal ofmodernizing energy trading through technology.

The former president of Atlanta's Continental Power Exchangepersuaded seven big banks and energy firms including GoldmanSachs, Morgan Stanley, BP and Royal DutchShell to back him in a challenge to energy giantEnron's stranglehold on the electricity market.

When Enron collapsed in 2001, ICE was deluged with orders.That same year, Sprecher led a takeover of London'sInternational Petroleum Exchange, giving ICE a European footholdin the futures market where it would grow into a dominant force.Sprecher, now 61, and his small team of top managers chosetechnology over tradition and as they pushed onward, showedlittle deference to tradition as they closed down historictrading pits.

In 2007, ICE bought the New York Board of Trade andattempted to buy the No. 2 U.S. futures exchanges, CBOTHoldings, for $9.9 billion - nearly disrupting a bid by the topfutures market, CME Group - which had to counter its offer.

The move attracted a lot of attention, especially with ICEexecutives slipping copies of the offer letter under the hoteldoors of Charlie Carey, CBOT's chairman, and Bernie Dan, itsCEO, at an industry conference in Boca Raton.

Whether Sprecher tables a bid for the LSE or not, theacknowledgement that he is considering it pushed LSE's shares toa record high on Tuesday, potentially raising the stakes forDeutsche Boerse, which is talking to the LSE about an all-sharemerger.

ICE declined to comment.

POWERHOUSE

A raft of acquisitions in quick succession cementedSprecher's deal making acumen and ICE as a global powerhouse infutures, equities, swaps, clearing houses and financial data.

When ICE bought NYSE, it was not its first attempt. AfterDeutsche Boerse and NYSE agreed to merge in early 2011, Sprecherteamed up with Nasdaq Inc's Bob Greifeld to propose acounter offer.

While there was never a formal offer, the overturethreatened Deutsche Boerse's plans and forced it to raise itsbid. But both deals were eventually opposed by regulators, whichsaid a Deutsche Boerse-NYSE marriage would have created anear-monopoly in European futures, while a Nasdaq-NYSE tie-upwould have created a U.S. listings monolith. But that did notstop ICE from making a successful solo takeover months later.

Now ICE threatens to crush Deutsche Boerse's LSE romance.

Regulation has generally worked in ICE's favor. Following ashort race car-driving career in the '80s, Sprecher spent nearlytwo decades building power plants at a time of deregulation inthe electric industry.

When he started ICE, he could see that transparency andefficiency were sorely needed in the industry and along withmoving to electronic trading, created standardized products thatcould be easily traded. As regulators began to talk aboutrequiring more derivatives trades to be carried out on exchangesrather than in private deals, ICE began acquiring clearinghouses.

In December, ICE spent $5.2 billion on data providerInteractive Data Corp and $650 million for energy brokerTrayport.

ATLANTA POWER COUPLE

Sprecher's wife, Kelly Loeffler, heads corporatecommunications and investor relations at ICE. The duo keep a lowprofile in New York, but are one of Atlanta's top power couples.

Sprecher, who as of Feb. 24, owned $319 million worth ofICE stock, according to Thomson Reuters data, is said to look atany possibly deal.

In January, he and Loeffler were reported to have mulled abid for the Atlanta Hawks NBA basket ball team, along with JohnBrock, CEO of Coca-Cola Enterprises Inc, and his wife.Loeffler and Mary Brock already co-own the Atlanta Dream WNBAteam.

Loeffler considered entering the 2014 race for the U.S.Senate, but decided against it because she too busy finalizingthe NYSE deal.

The couple contributed a total of $1,710,100 to the 2012election cycle, with most of the donations going to a super PACsupporting Republican presidential candidate Mitt Romney,according the website OpenSecrets.org. In 2014, the couplehosted a $25,000-a-head fundraiser with Romney and the chairmanof the Republican National Committee at their Atlanta mansion.Loeffler declined to comment on whether the couple will supportany candidates in the current presidential race. (Reporting by John McCrank; Editing by Carmel Crimmins, BernardOrr)

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A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

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