Exclusive-EquiLend stock lending platform for sale after collusion settlement -sources
Reuters
Published Sep 28, 2023 03:02PM ET
Updated Sep 29, 2023 07:20AM ET
By Amy-Jo Crowley, David French and Pablo Mayo Cerqueiro
(Reuters) - EquiLend Holdings LLC, the securities lending platform owned by 10 of the biggest Wall Street firms, including Goldman Sachs Group Inc (NYSE:GS) and BlackRock Inc (NYSE:BLK), is exploring a sale following settlement of a major collusion lawsuit, people familiar with the matter said.
The company is working with investment bank Broadhaven Capital Partners on an auction process, which is expected to draw interest from exchange operators, financial technology providers and private equity firms, said the sources. Euronext NV is one of the parties interested in EquiLend, one of the sources added.
EquiLend generates 12-month earnings before interest, taxes, depreciation and amortization of more than $25 million, two of the sources said. One of the sources added that EquiLend may fetch about $700 million in a sale.
The sources spoke on condition of anonymity to discuss confidential information. EquiLend and Broadhaven did not respond to comment requests. Euronext declined comment.
Euronext shares rose 2% to 66.45 euros on Friday.
It was unclear why the Wall Street firms that own EquiLend, which also include Bank of America Corp (NYSE:BAC), Morgan Stanley, UBS Group AG (SIX:UBSG) and JPMorgan Chase & Co (NYSE:JPM), are exploring a sale two decades after they launched it as a joint venture.
EquiLend agreed to corporate governance restrictions last month, including on how its board operates, to settle a lawsuit brought by several U.S. public pension funds accusing it of facilitating market collusion by its owners.
Founded in 2001, EquiLend provides a central platform for the trading of products associated with securities lending, as well as data and analytics for the industry and compliance technology.
It works with around 190 financial firms globally and has a staff of more than 330 people, according to its website.
Goldman Sachs, JPMorgan, Morgan Stanley and UBS agreed to pay $499 million last month to settle the lawsuit that accused them of conspiring to stifle competition in the stock lending market using EquiLend.
The lawsuit claimed the banks used their positions on EquiLend's board to maintain monopoly control over the market, and charge excessive fees to investors. The banks did not admit to any wrongdoing as part of the settlement.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.