BKI - Black Knight may have downside to $50 a share in an ICE deal break - report

2023-03-09 15:31:52 ET

Black Knight ( NYSE: BKI ) shares could drop to about $50 a share if InterContinental Exchange's ( NYSE: ICE ) planned purchase of the company were to be terminated due to regulators blocking it.

A survey of experts saw downside to $45 to $55 in a possible deal, according to traders, who cited a Bloomberg survey of 10 merger arbitrage specialists.

The survey comes after the Federal Trade Commission earlier Thursday filed a lawsuit to block the transaction , saying the deal would reduce competition and innovation in the market for mortgage loan technology and would drive up costs for lenders and homebuyers. The FTC commissioners voted unanimously, 4-0, to file the lawsuit to block the combination.

Black Knight ( BKI ) shares fell 2% and ICE ( ICE ) dropped 2.9%.

Black Knight ( BKI ) has proposed a deal to sell Empower LOS and some related services to Constellation Web Solutions. But the FTC, according its complaint, says "the proposal does not address the anticompetitive effects in the market for PPE software and would not replace the intense competition between ICE and Black Knight in the LOS market."

"The FTC’s attempt to block the combination, despite this divestiture remedy, is without merit and serves only to delay improving the experience and outcomes for all participants in the mortgage industry," ICE said in a statement on Thursday.

Earlier this week, Bloomberg reported that the FTC was poised to file a lawsuit challenging the sale.

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