Shareholders in Climate Exchange, the operator of the European, Chicago and Chicago Futures carbon emissions exchanges, will receive 750 pence a share in cash, representing a 57 percent premium on Thursday's closing price, ICE said in a statement on Friday.
Climate Exchange was founded by Richard Sandor, a longtime futures industry executive in Chicago.
ICE, which already provides technology and clearing services to Climate Exchange, said it would combine the British company's emissions markets with its own futures and energy markets.
ICE Chairman and CEO Jeffrey C. Sprecher said, "The leadership that Climate Exchange has shown in establishing market standards in Europe, and increasingly the U.S. and Asia, has driven its success, and we see continued growth opportunities within these nascent markets globally."
Atlanta-based ICE said the deal would slightly reduce earnings for the remainder of 2010, but would add to earnings from 2011.
"Carbon has become a vital part of the energy market (and) this is a commitment from one of the world's biggest exchanges to this market, so it's good news for the environmental markets and for our clients," said Climate Exchange CEO Neil Eckert, adding that it was unclear whether he would stay on as chief of the world's biggest emissions exchange operator.
Climate Exchange dominates exchange trading in European Union carbon permits, a market worth some $100 billion in 2009.
The company also has interests in burgeoning emissions exchanges in China, Canada and Australia.
KBC Peel Hunt says ICE has timed its bid well and that the 750-pence-per-share offer is not generous given that it is close to KBC's fair value for Climate Exchange, which did not include a bid premium.
"A counter-bidder could have paid more but has been squeezed out. There is no real alternative but to accept the offer," analyst Andrew Shepherd-Barron says.
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