The deal spread for Intercontinental Exchange’s (NYSE:ICE) planned $11.7 billion takeover of Black Knight (NYSE:BKI) narrowed amid some speculation of an upcoming settlement with the Federal Trade Commission.
The deal spread narrowed to $4.25 on Friday from $5.01 on Thursday as M&A investors speculated on a potential settlement this weekend after the parties asked for and were granted a delay until Monday in filing briefs for the case.
The FTC’s hearing for a preliminary injunction to block the combination is scheduled for Aug. 14, with a pretrial conference set for this Tuesday.
The settlement chatter comes after the companies agreed to a new divestiture to try to satisfy the antitrust regulator last month. The companies and the FTC also agreed to delay the trial from last month until this month.
ICE and Black Knight (BKI) last month agreed to sell Black Knight’s Optimal Blue business to Constellation Software (OTCPK:CNSWF) for $700 million. Black Knight jumped 16% on the news, as it appears the deal may be finally coming to fruition after it was announced last May.
“As a result of our agreeing to sell Optimal Blue, our federal trial was rescheduled to August 14, and we are in a dialogue with the FTC about potential resolution,” ICE CEO Jeffrey Sprecher said on the company’s Q2 earnings call on Thursday.
In March, the FTC sued to block the Black Knight (BKI) 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.