Corporate News

By Daphne J. Magturo, Reporter

PSE makes final offer to shareholders of PDS, deal sealed by August -- Sicat

Posted on April 22, 2015

THE PHILIPPINE Stock Exchange (PSE) has made a final offer to buy out shareholders of Philippine Dealing System Holdings Corp. (PDS) and targets to seal the deal by August.

“We’ve asked the shareholders. It’s the same valuation -- P2.25 billion. Of course, some want more, but we think that represents fair value,” PSE President and Chief Executive Officer Hans B. Sicat said on the sidelines of the Asia Finance Summit at the Makati Diamond Residences yesterday.

Mr. Sicat had earlier said the PSE was open to price adjustments.

Asked why he changed his mind, Mr. Sicat replied: “That’s our deal.

We already gave out the terms so either people accept it or they don’t. People can decide to monetize or people can decide to stay -- it’s their choice.”

The PSE is targeting to increase its ownership in PDS to at least 67% from 21% currently.

“After this transaction, PDS will be a subsidiary of the PSE. So if you’re a shareholder who decides to stay, you’re a minority shareholder in the subsidiary of the PSE -- you can take your chances.”

Mr. Sicat had said that remaining minority shareholders of PDS “might feel that they do not have a strong voice in controlling its direction.”

PDS is the holding firm of the Philippine Dealing & Exchange Corp., the country’s trading platform for corporate bonds, government treasury papers, and foreign exchange.

PDS shareholders can accept the buyout offer before the PSE holds its annual stockholders’ meeting (ASM) on May 2, when PSE shareholders will vote on whether or not to approve the acquisition.

“Everyone has a few more days. Hopefully, PDS shareholders will [give feedback] so we know where we stand before the annual meeting,” Mr. Sicat said.

“We need our shareholders to vote positively on May 2 for the acquisition.”

After the ASM, it will take another two to three months to close the deal, he added.

The Bankers Association of the Philippines, which owns 28.9% of PDS, signed a term sheet with the PSE in October 2014 wherein both parties agreed on the terms and conditions of the buyout.

But Singapore Exchange Ltd. (SGX), which holds 20%, had expressed unwillingness to sell its stake. Mr. Sicat yesterday said SGX has not yet responded to its final offer.

On Nov. 20 last year, the PSE announced that it agreed with minority shareholders San Miguel Corp. (SMC) and Golden Astra Capital on the indicative terms for the proposed purchase of SMC’s 4% and Golden Astra’s 0.36% share in PDS.

Other minority shareholders are Computershare Technology Services (8%); Tata Consultancy Services Asia (8%); The Philippine American Life and General Insurance Co. (4%); Financial Executive Institute of the Philippines (3.1%); Social Security System, or SSS (1.5%); and Investment House Association of the Philippines (1.1%).

PSE and PDS began negotiations for a possible merger back in May 2013, with completion originally targeted by end-2013. The merger is expected to boost the country’s efforts to join a cross-border trading platform that links Southeast Asian stock markets.