ICE's Sprecher, Undeterred By NYSE Loss, Looks To Further Deals

The head of IntercontinentalExchange Inc. (ICE) said he won't shy away from more "offensive" dealmaking despite regulators blocking his effort to acquire the derivatives arm of NYSE Euronext (NYX).

Jeff Sprecher, chairman and chief executive, said that his one-time target's planned merger with Deutsche Boerse AG (DB1.XE) may create opportunities if regulators force them to sell or exit from business lines to secure their deal's approval.

Sprecher had long coveted the Liffe derivatives arm of NYSE Euronext, and the collapse of the joint bid for its parent with Nasdaq OMX Group Inc. (NDAQ) marks the second time he has failed to pull off a transformational deal after losing out to CME Group Inc. (CME) in 2007 for control of the Chicago Board of Trade.

"I don't want this company to lose the ability to take calculated risks," Sprecher said in an interview. "I don't mind public failures."

ICE is expected to refocus on developing its family of commodity market ventures, which Sprecher built through a series of cross-border deals ranging from Europe to China and Brazil.

Sprecher saw no reputational damage to ICE in its pursuit of NYSE, which tapped into the idea of ensuring U.S. relevance as a center for capital-raising, though he acknowledged that he may get a rap for losing contentious deal battles.

"We got here by being offensive and by taking calculated business risks," Sprecher said. "I've had more failures than successes, it's just that my successes have been very good."

Sprecher is viewed as one of the industry's best innovators, and has diversified ICE from its roots as a power exchange into one of the leading platforms for global energy trading, moving into agricultural commodities by acquiring the New York Board of Trade and establishing a lead in the clearing of over-the-counter derivatives.

The organic growth opportunities for ICE appear broader to analysts than those presented to Nasdaq OMX CEO Bob Greifeld, who is seen eyeing alternative deal partners after the U.S. Justice Department swiftly killed his bold bid to buy NYSE Euronext's equities and options business.

Sprecher has been careful to measure his response to the regulator's decision on Monday, but sees it providing more clarity on how competition officials view the sector at a time of sweeping overhauls on both sides of the Atlantic.

The prospect of picking up any forced divestitures from a NYSE-Deutsche Boerse tie is one potential positive, he said.

U.S. officials concluded that combining NYSE's equities businesses with those of Nasdaq OMX would create a "two-to-one monopoly" that couldn't be avoided, even by spinning off the New York Stock Exchange.

Sprecher said this showed that antitrust authorities looked at NYSE Euronext's trans-Atlantic business as a whole when weighing the impact on competition for share listings, which would have been broadly reduced in the U.S. by a combination with Nasdaq OMX.

"That'll be helpful to me as I contemplate M&A, and as I look at other deals that may spin things out or create opportunities for us, as may be the case in the DB-NYSE deal," he said.

European regulators have signaled they are likely to conduct an in-depth review of a deal that would combine the German group's Eurex arm and NYSE Liffe, the region's two dominant venues for listed derivatives.

The merger partners contend that Eurex doesn't compete directly with the Liffe exchange, with little overlap in terms of contracts traded.

Sprecher said that competition between exchanges for share listings--largely focused before a company comes to market--is analogous with that between futures platforms as they develop new products.

"Once a product is established, it tends to stay settled on one exchange or another," he said. "I would argue that there's tremendous competition to attract new products onto futures exchanges."

ICE's share price jumped after withdrawing the bid for NYSE Euronext and is 3.6% higher this week. Shares recently were up 0.2% at $122.57.

-By Jacob Bunge, Dow Jones Newswires; 312 750 4117; jacob.bunge@dowjones.com

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