LAND BANK of the Philippines (LANDBANK) is still keen on acquiring majority stake in Philippine Dealing System Holdings Corp. (PDSHC), operator of the country’s fixed-income bourse, and is updating its proposal.

“We are still intent on buying,” LANDBANK President and Chief Executive Officer Cecilia C. Borromeo said in an interview on the sidelines of 2019 Retail Banking Forum held on May 2 in Makati City. “We wrote those who replied to our first offer. We’re just updating the number.”

The state-owned bank plans to acquire the majority stake of the fixed-income bourse operator as part of a government push to further develop the capital markets. It had twice extended twice the deadline for interested parties to take up its offer to purchase remaining PDSHC shares to March 15 and Jan. 31 from an initial end-2018 target.

LANDBANK had initially priced PDSHC shares at P215 apiece or a total of P281.96 million.

MOVING TO UPDATE OFFER PRICE
The latest price is about 40% less than the P360-per-share offer initially approved by the LANDBANK board, taking into account the P600-million dividends the PDSHC issued in June that reduced its assets.

Ms. Borromeo added that LANDBANK will tap a “third-party entity” to “update the valuation of shares.”

LANDBANK sought to take over the fixed-income exchange after delays in the Philippine Stock Exchange’s (PSE) planned acquisition of PDSHC. PSE began these efforts in 2013.

The PSE had already secured a 72% ownership of PDSHC in early 2018, although its share purchase agreements with various stakeholders lapsed in March last year since it failed to obtain exemption from the Securities and Exchange Commission (SEC) to waive the 20% single-industry ownership limit.

Section 33.2 (c) of Republic Act No. 8799, or the Securities Regulation Code, caps bourse ownership by an industry at 20% and individual ownership at five percent.

The SEC is authorized to exempt industries and individuals from this restriction to enable them to acquire more than the law permits, provided such control “will not negatively impact on the exchange’s ability to effectively operate in the public interest.”

In April, the PSE said it will have to issue about P5 billion worth of shares to bring down broker ownership to comply with the ownership limit.

PDSHC is 21% owned by the PSE, while LANDBANK owns 1.56% through Bankers Association of the Philippines. — Karl Angelo N. Vidal

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