Darius Snieckus
OGJ Online
LONDON, Apr. 30 -- The boards of International Petroleum Exchange PLC and Atlanta-based internet energy market IntercontinentalExchange Inc. Monday set out the terms of all-paper takeover bid valued as high as $131 million that would create one of world's largest energy and commodities exchanges.
The acquisition will involve an exchange of ICE Class A and B shares, the latter being redeemable for cash during a specified period of time, for every IPE Holdings share. IPE shareholders will have 12 months after the IPE's migration to an electronic platform to cash in shares worth around $65 million of the total offer or convert them in to Class A shares.
The IPE was last valued at $43 million, before trading in its shares was halted to consider the proposal.
In a recent poll of its shareholders, the IPE found 80% were in favor of the merger with ICE, the electronic exchange formed last May by a consortium including the Continental Power Exchange Inc., The Goldman Sachs Group Inc., several affiliates of international oil companies, and two investment banks. The "two share" share-for-share exchange was reported to be only one of the key features on which the deal will be sold to many of the IPE's shareholders, who now have up to 28 days to consider the offer.
"The complementary nature of the ICE and IPE businesses is expected to produce significant benefits for market participants and shareholders," the two said in a joint statement. "In addition, the combined business will have access to a valuable range of market information and data which will be further developed as a service to customers and source of revenue generation."
The companies said if the merger goes through, more active consideration would be given to an initial public offering by ICE, currently a private concern.
ICE and IPE said they intend to stick with the current structure and management of IPE "to ensure an orderly transition to electronic trading" and coordination of the transition with its regulator, the Financial Services Authority.
Getting shareholder approval of the takeover would end the IPE's long search for a technology partner.
Contact Darius V. Snieckus at [email protected]
