The Federal Trade Commission (FTC) granted a joint motion from all parties postponing the start of the commission’s administrative hearings on the proposed acquisition of Black Knight by Intercontinental Exchange (ICE). The delay was granted to allow time for the U.S. District Court for the Northern District of California to rule on a motion by the FTC seeking a temporary restraining order and preliminary injunction to halt the acquisition until after the administrative hearing has concluded.
The FTC is seeking federal court intervention to prevent the acquisition that was intended to close “immediately following a vote of Black Knight shareholders scheduled for April 28, 2023.”
In the commission’s petition for the preliminary injunction, it stated it “require[d] the aid of this court to maintain the status quo and prevent interim harm to competition during the pendency of an administrative proceeding on the merits.”
Since the acquisition was announced, the FTC has expressed its concern of the consolidations in the mortgage technology sector that would occur if an ICE acquisition of Black Knight were completed. ICE and Black Knight each operate one of the two largest loan origination systems (LOS) in the U.S.
To appease some of these concerns, Black Knight announced it would sell its Empower LOS to a subsidiary of Constellation Software. The sale of Empower is conditioned on ICE closing its acquisition of Black Knight. This potential sale also reduced the overall price to purchase Black Knight by $1.3 billion.
The FTC, however, stated in its injunction petition that the proposed sale of Empower did not resolve the concerns the commission had about the anticompetitive nature of the deal.
The petition adds that “preliminary relief is warranted and necessary. Should the commission rule, after the full administrative proceeding, that the acquisition is unlawful, reestablishing the status quo would be difficult, if not impossible, if the acquisition has already occurred in the absence of preliminary relief.”
According to the statement given in the joint motion to delay the administrative hearings, the parties have agreed to the delay because the federal district court presiding over the preliminary injunction proceeding “expressed its view that the hearing in the Section 13(b) [injunction] case should precede the administrative hearing.”
The commission granted the motion, rescheduling the evidentiary hearing in the case for Sept. 25, and extending “all related pre-hearing deadlines” by 75 days.