BKI - Black Knight ticks higher as Einhorn's Greenlight sees 75% chance of ICE deal close

2023-04-27 12:49:13 ET

Black Knight ( NYSE: BKI ) ticked up 0.5% amid a disclosure that David Einhorn's Greenlight took a position in the mortgage software company in Q1 and sees a high likelihood its sale to InterContinental Exchange ( NYSE: ICE ) will close.

Greenlight sees a 75% chance of the deal closing, though Black Knight's ( BKI ) current price implies a just greater than a 25% chance of the deal succeeding, Greenlight's Einhorn wrote in a Q1 letter to investors viewed by Seeking Alpha.

Greenlight sees Black Knight trading at $51 a share in a deal break scenario. The hedge fund acquired the shares for an average price of $60.59.

The analysis comes after the Federal Trade Commission last month sued to block the BKI/ICE combination , 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 asked the federal court earlier this month to temporarily block the merger, while it works to block the deal through an internal administrative law judge. The FTC's administrative hearing on the transaction is set for July 12.

"In order to cure the only meaningful overlap between the two companies businesses, ICE has also offered to divest BKI's mortgage origination unit," Greenlight wrote in the letter. "Despite the pending sale of this business to Constellation Software, the FTC sued to block the deal."

Black Knight ( BKI ) shareholders are scheduled to vote on the sale to ICE on Friday.

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