February 6, 2020 / 12:52 PM / 19 days ago

UPDATE 2-ICE makes case for eBay talks following earnings report

(Adds details on eBay approach from post-earnings conference call, CEO quotes)

By John McCrank and C Nivedita

Feb 6 (Reuters) - New York Stock Exchange owner Intercontinental Exchange Inc (ICE) would "love" to speak with eBay Inc about a potential deal if its management is interested, the company's chief executive said on Thursday following the release of ICE's financial results.

ICE confirmed on Tuesday it had approached eBay to explore "a range of potential opportunities," following reports it had mulled a more than $30 billion takeover of the online marketplace, but that eBay was unresponsive.

The statement left most analysts questioning how ICE, which also runs futures exchanges and clearinghouses, and provides financial data, would absorb the e-commerce company, sending the company's shares down more than 7%.

"I didn't think it's particularly shocking and outrageous," CEO Jeffrey Sprecher told analysts on a post-earnings call.

"I'm not sure that it's been fair for the market to hold eBay accountable as an e-commerce company and compare it to the likes of Amazon, and whether or not it should be viewed as a 25-year-old cash market for collectible goods, which looks a lot more like the New York Stock Exchange," he said.

Sprecher said he first reached out to eBay around 20 years ago when ICE was launching as a place to match buyers and sellers of electric power, and that then-CEO Meg Whitman advised him on building an online marketplace. He said eBay was one of dozens of companies ICE has continued to share ideas with.

In recent years, ICE has made acquisitions that have helped it expand beyond its traditional transactional revenue model, to more stable subscription-based revenues, leveraging data and expanding into areas like electronic mortgage registrations, rewards points, and a market for purchases in video games.

"We know the lane that creates value for us," Sprecher said. "And so when we think about, is there a marketplace for airline miles or swords and sickles that are on a video game, we're not crazy. We didn't lose our minds. We know what our platform does and we know how to lever it."

The Atlanta-based company said its fourth-quarter profit fell 27%, mainly due to lower revenue from its transaction and clearing business, as market volatility declined.

Quarterly net income fell to $448 million, or 80 cents per share, from $611 million, or $1.07 per share, a year earlier. Discarding onetime items, like merger and acquisition costs, ICE earned 95 cents per share, meeting analysts' estimates.

ICE's shares were down 3.7% at $89.44 on Thursday morning. (Reporting by C Nivedita in Bengaluru and John McCrank in New York Editing by Saumyadeb Chakrabarty, Arun Koyyur and Jonathan Oatis)

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