THE LAND BANK of the Philippines (LANDBANK) made a fresh offer last week to acquire a majority stake in the local fixed-income exchange, as it hopes to snatch deals previously secured by the Philippine Stock Exchange (PSE).
LANDBANK President and Chief Executive Officer Alex V. Buenaventura said the state-run lender made a second attempt last Friday to convince more shareholders of the Philippine Dealing System Holdings Corp. (PDS) to sell, kicking off another 30-day offer period.
“We reissued fresh offer letters last Friday to all PDS shareholders, because the first round which we did last March, not too many accepted our offer… That’s for a 30-day period for the same amount at P360 per share,” Mr. Buenaventura told reporters on Monday.
The PDS Group operates trading, clearing and settlement for bonds and foreign exchange through the Philippine Dealing & Exchange Corp., the Philippine Depository & Trust Corp., Philippine Securities Settlement Corp.
LANDBANK’s board of directors approved in February the plan to acquire 66.67% of PDS, triggering a showdown between the biggest state-owned lender and the PSE in gaining control of the fixed-income bourse.
The PSE had been working on the PDS buyout as early as 2013, as it targeted to merge the country’s equities and fixed-income bourses. Since June, the stock market operator had signed share purchase agreements with the Bankers Association of the Philippines (BAP); Whistler Technologies Services, Inc.; Investment House Association of the Philippines; The Philippine American Life and General Insurance Co.; FINEX Research and Development Foundation, Inc.; San Miguel Corp. and Tata Consulting Services Asia-Pacific Pte. Ltd., giving the PSE a 69.03% total stake in PDS.
These agreements lapsed on March 31, in effect maintaining status quo on PDS ownership.
Currently, LANDBANK owns 1.56% of PDS through the BAP, which holds a cumulative 13.26% share for itself and its member-banks.
Mr. Buenaventura said only one shareholder agreed to LANDBANK’s proposal during the first offer last March 5-April 5, but declined to give details.
The bank’s fresh offer — P360 per share in cash, versus the PSE’s P320 offer to be paid in shares — will run until May 20.
The bank intends to buy 4.167 million common shares worth a total of P1.5 billion, with Mr. Buenaventura saying that the PDS stands as a “potentially profitable investment” for the bank.
The Securities and Exchange Commission caps at 20% industry ownership and at five percent individual ownership of an exchange, but may grant exemptions if bigger control “will not negatively impact on the exchange’s ability to effectively operate in the public interest.”
Mr. Buenaventura said LANDBANK wants majority control in PDS to push capital-raising initiatives for small businesses, believing this concern will “not be given focus” under PSE’s watch. — Melissa Luz T. Lopez

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