WSJ: Bloomberg LP could fetch $50 billion

Telis Demos of The Wall Street Journal examines the possibilities of a sale of Bloomberg LP, the parent of Bloomberg News and Bloomberg Media, should majority owner Michael Bloomberg become president.

Demos writes, “So what would Bloomberg LP be worth? Refinitiv, which sells a competing terminal and also has data and trading assets, was acquired by LSE at an enterprise value of about 13 times Ebitda. Using that multiple, Bloomberg could be have an enterprise value of $50 billion.

“There are arguments why the multiple should be even higher, such as Bloomberg’s even more central role on Wall Street with its chat function; or lower, because it might be harder to break out and sell any chunks that fetch a higher multiple. But without public financial statements to peruse, guesswork is required.

“Using Refinitiv’s deal as a guide, there are a couple of obvious partners: exchanges CME Group and Intercontinental Exchange, known as ICE. CME, with a market value of $73 billion, could buy all of Bloomberg LP for stock and still take Mr. Bloomberg out of a controlling position (he is said to own slightly less than 90% of Bloomberg LP).

“ICE is smaller, valued at $52 billion. But it may be a more natural strategic fit. ICE in 2015 acquired a fixed-income data business that competes with Bloomberg LP, Interactive Data, and both firms are major players in the fast-evolving electronic bond-trading market—something for which investors are willing to pay rich multiples. Those overlaps may be reasons to do a deal. They might also be reasons not to, perhaps for antitrust reasons.”

Read more here.