PSE’s terms for PDS sale keep changing, Finance dep’t complains

THE GOVERNMENT said the Philippine Stock Exchange (PSE) is imposing constantly changing conditions for signing the agreement to sell its 20% stake in the Philippine Dealing System (PDS), a fixed-income exchange, thereby slowing the deal’s completion.
Finance Secretary Carlos G. Dominguez III said that Land Bank of the Philippines (LANDBANK) reported to him that the PSE has expressed its intent to sell its stake in the Philippine Dealing System Holdings Corp. (PDSHC), but has asked to include the Bankers Association of the Philippines (BAP) in the share purchase agreement.
“They keep on changing. They were supposed to sign, now PSE wants to sign together with BAP,” Mr. Dominguez told reporters late Wednesday at the Finance department headquarters.
“So why are you putting so many conditions when in fact, it’s just a goddamn share purchase agreement. Why are you saying now that we will sign with those other guys?” he said.
Mr. Dominguez, who is ex-officio chairman of LANDBANK, said only the PSE, not the BAP, signed the non-disclosure agreement (NDA) with LANDBANK in connection with the negotiations for the sale.
“I said I want an NDA with all shareholders. If you don’t want to sell, I will not give you an NDA, what for? I have absolutely no idea what they are doing,” added Mr. Dominguez.
“So why should I expose myself like that? Why don’t I just deal with him, why do you have to get involved? I’m really at a loss… this is just a simple share (transaction). Now I understand why it took them five years to get this thing going,” he said.
The reason for PSE’s condition is still unclear, and it has yet to respond to queries at deadline time.
However, Mr. Dominguez said that he is “willing” to undertake separate negotiations with the BAP, but wants to proceed with the purchase of PSE’s 20% stake as quickly as possible.
He said that the BAP itself only has a 0.66% share in the PDS, not counting the stakes held by its member-banks.
“Only 0.66%, it’s nothing. I’m not going to sign for 0.66%… why are you putting these conditions? We can buy BAP’s shares but… you’re going to hold me up for 0.66%? Come on,” he said.
“Why so complicated? And it’s simple, do you want to sell or not? That’s the only question, don’t give me other conditions,” Mr. Dominguez said.
He noted that the offer, so far, remains at P360 per share.
However, he said that he as no target date to have the share sale agreement signed. “It’s useless because when you reach (the point of signing), they say no we want this condition. They cannot seem to get their act together.”
The government wants to take at least a majority stake in the fixed-income bourse through LANDBANK, after PSE failed to proceed with its merger with the PDS, in a bid to expedite the development of the capital markets.
The PSE failed to secure exemptive relief from the Securities and Exchange Commission on the 20% single-industry ownership limit, after failing to dilute broker ownership in the equities exchange to less than 20% — event as it had already secured about 69.03% of PDS in various share sale agreements that lapsed in end-March.
LANDBANK President and Chief Executive Officer Alex V. Buenaventura said earlier that other PDS shareholders may be gauging PSE’s moves before they also agree to the government’s offer. — Elijah Joseph C. Tubayan