Tomato, tom -ah- to, part 2
Over-the-counter vs. exchange-traded. A more emotionally charged debate than crunchy vs smooth. (peanut butter for non-North Americans) Or Chicago vs New York.
That’s why the only deal that could top Icap’s acquisition of EBS for smartest financial services deal of the year, would be for Icap to acquire the LSE. From an industrial point of view a dead obvious trade (and fully cogniscent that I will be accused of Monday morning quarterbacking, literally!), this was a combo (not necessarily Icap/LSE but OTC broker/exchange) that I always felt was missing from AmazonBay. And indeed one of the reasons I have avoided subsequently writing about such a deal was that in the back of my mind I harboured the possibility of personally trying to get in the middle of some such combination in one way or the other. Well now the cat is out of the bag. (btw this link could have been to the FT but for their dumb paywall policies…)
The papers report that there is no deal on the table (for now at least) due to financial considerations and the large blocking Nasdaq stake, although the Times makes the obvious point that perhaps a three-way deal could be arranged (clearly always very tricky from a practical point of view but in principle why not?) and valuation issues sometimes resolve themselves.
I’d be interested to see how Betfair would price the probabilities of a 2-way and a 3-way deal happenning in the next 12 months…I’d be surprised if the odds ended up being much longer than 3-1 and 8-1 respectively. (based on a completely unscientific 10 second long ’stab-in-the-dark’ reflection…)
