Bourse mergers are never easy, and the possible tie-up of London Stock Exchange (LON:LSE) with Deutsche Boerse (ETR:DB1) announced last week received a fresh complication in the guise of speculation on Tuesday that the owner of the New York Stock Exchange might bid for LSE.
It is the third time that the LSE and Deutsche have tried to tie the knot. In 2000 and again in 2004 they wrangled over the details as the open outcry pits began to be dismantled in Europe in favour of more efficient electronic platforms.
Whether this $28bn-equivalent deal will be third time lucky for the two European rivals is more unclear today than it was 16 years ago.
Intercontinental Exchange (ICE) (NYSE:ICE), the owner of the NYSE, said on Tuesday it is considering making a takeover offer for the LSE. That is still vague, but there is no reason to imagine that the ICE's intentions are anything but straightforward.
Some pundits may feel that ICE has made the remark, and might follow up with an unrealistic offer, merely to scupper the European merger. After all, ICE has dropped European interests before, albeit the product of acquisitions it inherited.
Back in 2007, the NYSE merged with Paris-based Euronext to form the first global equities exchange, with its headquarters in Lower Manhattan. The constituents were then part of ICE from 2013, although a year later it spun off Euronext.
Despite the Euronext experience, there is no reason to suppose ICE's European ambitions are fickle. ICE, if anything, senses the real challenge posed to its interests globally by a LSE tie-up with Deutsche. Similarly, the Chicago-based derivative market CME (NASDAQ:CME) would feel the heat.
ICE has a month in which to decide whether its talk has legs. Under UK merger rules, ICE must make or announce an offer for the LSE no later than March 29. Hence why some might speculate that ICE initiated a spoiler for the Europeans.
The German exchange has until a UK Takeover Panel deadline of March 22 to make a formal offer for the LSE.
If that was not complicated enough CME is also working with advisers to assess whether it could challenge the deal, reported financial news agency Bloomberg citing unidentified sources.
On the heightened speculation about ICE, shares of LSE closed up 7.1% at £2,869 on Tuesday in London. In Frankfurt, Deutsche shares ended up a more modest 0.9% at 76.87 euros, and ICE shares in New York were down 2.9% at $231.51. Meanwhile, CME shares were up 0.8% at $92.20.
That's how the markets that carry the stocks look today. How about the action within those markets?
RISERS
Kate Spade (NYSE:KATE) shares jumped 10.3% to $21.88 after the clothing, handbag, and accessories maker earned an adjusted 32 cents per share for its latest quarter, matching estimates, though revenue was short of forecasts. The company also reported a same-store sales increase of 7.6 percent.
Dollar Tree (NASDAQ:DLTR) shares advanced by 2.1% to $81.96 after the discount retailer saw quarterly same-store sales rise by 1.7%. That cheered otherwise missed estimates by 6 cents with quarterly profit of $1.01 per share and revenue slightly below forecasts in what the company calls a "challenging" macroeconomic environment.
FALLERS
Valeant Pharmaceuticals (NYSE:VRX) shares were down 1.9% at $64.53 after the New York-listed Canadian drugmaker confirmed that it was under investigation by the Securities and Exchange Commission. The probe is said to involve its former relationship with drug distributor Philidor Rx Services, although Valeant itself did not give specific details.
Medtronic (NYSE:MDT) shares eased by 4.4% to $73.95 after the medical products maker matched estimates with adjusted quarterly profit of $1.06 per share, and revenue was essentially in line.