LANDBANK reduces offer for PDS Holdings
THE LAND BANK of the Philippines (LANDBANK) will lower its share purchase offer to stakeholders of the Philippine Dealing System Holdings Corp. after the operator fixed-income bourse declared dividends in June.
LANDBANK President and Chief Executive Officer Alex V. Buenaventura said that the bank will revise its share purchase offer to shareholders who initially accepted its P360 per share offer.
“End of next week it will be our response to their acceptance letter. The P360 per share offer was based on four months ago, so at that time they have not yet declared P600 million in dividends,” Mr. Buenaventura told reporters on the sidelines of the bank’s client recognition program late Wednesday.
He added that the bank has yet to arrive at a new offer price.
He said the dividend declaration on June 28 effectively lowered the value of PDS Holdings.
“When you make an offer it’s based on the net asset value of the PDS. We made the P360 offer to buy based on the net asset value prior to their declaration of the dividend,” Mr. Buenaventura said.
“What we are buying now is P600 million less than the net asset value, (so we need) to set a revised purchase offer,” he said.
Mr. Buenaventura said that shareholders representing 43% of PDS Holdings have accepted the initial offers.
He said LANDBANK remains committed to taking a majority of the bond exchange operator.
“We are still going for 67%,” Mr. Buenaventura said.
LANDBANK started to send out buyout offers to PDS Holdings shareholders in March amid plans of the Philippine Stock Exchange (PSE) to do the same.
Although the PSE’s planned merger with the PDS Holdings was in the advanced stages — obtaining acceptances from up to 72% of shareholders — it failed to obtain exemptive relief from regulators to waive the 20% single-industry ownership limit.
The application was rejected because the PSE did not meet a requirement to dilute broker ownership in the equities exchange to less than 20%.
Talks for the merger started in 2013, and the share purchase agreements with PDS Holdings shareholders expired in March.
LANDBANK then stepped in as an acquirer, hoping to expedite the development of the capital markets. Mr. Buenaventura has said that the PSE was among those that indicated interest to sell its PDS Holdings shares.
LANDBANK’s net profit in the first quarter grew 52% to P4.26 billion. — Elijah Joseph C. Tubayan