IntercontinentalExchange Merger with IPE Nearly Iced

U.S.-based IntercontinentalExchange's (ICE) takeover of Europe's International Petroleum Exchange is basically a done deal, with approval of 89.6% of the shares. As of June 15, ICE's financial adviser, Goldman Sachs, had received 10.25 million shares of acceptance, and with 90% or more of IPE shares in hand, ICE may exercise its right to acquire the rest of the outstanding shares.

"ICE Inc. is pleased to announce that all of the conditions of its recommended offer to acquire the issued and to be issued share capital of IPE Holdings have now been satisfied or waived, and that the offer is accordingly declared unconditional in all respects," ICE officials said in a statement.

The deal was announced in late April (see Daily GPI, May 1), but merger talks had been ongoing for several months. Combined, the two exchanges have 4,000 individual users.

With the merger, ICE would add London-based IPE's energy futures contracts and Brent Crude to its over-the-counter energy derivatives. IPE shareholders would receive up to 10% of ICE with the merger. ICE will pay IPE shareholders B class shares worth $5.895 that are redeemable one year after IPE contracts trade exclusively electronically for 10 days, which would value the IPE at $67.5 million. Shareholders also will receive an equal number of A class shares in ICE equity.

ICE was founded in 2000 by a group of energy and investment companies, including BP, Royal Dutch/Shell Group, TotalFinaElf, Deutsche Bank, Goldman Sachs, Morgan Stanley Dean Witter and Societe Generale (see Daily GPI, March 22, 2000). BP, Total, Goldman Sachs and Morgan Stanley also are on IPE's 14-member board of directors. Since the original formation, additional partners include Aquila Energy, American Electric Power, Duke Energy, El Paso Corp., Reliant Energy and Mirant. Based in Atlanta, ICE has offices in Houston, New York City, Chicago and London.

ICE CEO Jeffrey Sprecher and IPE CEO Dr. Richard Ward have scheduled a telephone briefing today at 10:30 a.m. EST to discuss the merger. The dial-in number is (800) 230-1074, and the briefing is reserved under "ICE/IPE Briefing."

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