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LANDBANK offers to buy PSE’s PDS shares for P472M

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By Arra B. Francia, Reporter

THE Philippine Stock Exchange, Inc. (PSE) said it has received an offer from the Land Bank of the Philippines (LANDBANK) to acquire its shares in the Philippine Dealing System Holdings Corp. (PDSHC) for P472.12 million.

In a disclosure to the stock exchange on Friday, the PSE said LANDBANK offered to buy its shares in the fixed income exchange for P360 each. The bourse operator currently has a 20.98% stake in PDSHC.

The PSE said its board of directors has yet to discuss the offer.

LANDBANK announced that it made an offer to the shareholders of PDSHC last week, in line with its goal to buy 4.167 million common shares in PDSHC — equivalent to a 66.67% stake — worth P1.5 billion. The offer period will last for 30 days or until May 20.

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The state-run lender said it wants to take control of the PDSHC to support the capital raising activities of small businesses, with LANDBANK President and Chief Executive Officer Alex V. Buenventura noting that this sector will not be given a focus should the PSE take over.

This is the second time LANDBANK will be offering to buy out shareholders of PDSHC. Its first bid ran from March 5 to April 5, where only one shareholder agreed to the bank’s proposal.

LANDBANK’s offer came amid the expiration of PSE’s share purchase agreements (SPA) with PDSHC’s shareholders last March 31.

The shareholders include the Bankers Association of the Philippines, Whistler Technologies Services, Inc., Investment House Association of the Philippines, The Philippine American Life and General Insuranc Co., FINEX Research and Development Foundation, Inc., San Miguel Corp., and Tata Consulting Services Asia-Pacific Pte. Ltd.

This would have brought PSE’s shareholdings in PDSHC to 69.03%, but the company failed to push through with its acquisition as it has yet to secure regulatory approval from the Securities and Exchange Commission.

The PSE’s acquisition of PDSHC depends on getting exemptive relief from the SEC, which will allow it to own more than 20% of an exchange. The Securities Regulation Code limits industry ownership of an exchange to 20%, and 5% for individual ownership. The PSE would have to prove that having a dominant control of the PDSHC will not negatively impact its ability to operate in the public interest.

In addition, the PSE itself has yet to bring down its broker ownership to less than 20%. By the end of PSE’s stock rights offering last March, trading participants’ stake still stood at 21.71%.

Despite the expiration of PSE’s SPA with PDSHC’s shareholders, it said it remains committed to the deal.

“PSE is committed to its vision to unify the fixed-income and equities markets and enable all stakeholders to reap the accruing benefits of an integrated capital market,” it said in an earlier disclosure.

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