PSE acquires Philam’s 4% stake in PDS for P80 million

THE Philippine Stock Exchange, Inc. (PSE) has once again raised its stake in the Philippine Dealings System Holdings Corp. (PDSHC), after acquiring The Philippine American Life and General Insurance Co.’s (Philam) shares in the fixed-income bourse for P80 million.

The PSE disclosed on Tuesday the signing of a share purchase agreement (SPA) with Philam involving all of its shares in the PDSHC or 250,000 common shares, which translates to a 4% stake in the company. This effectively increases PSE’s ownership in the PDS group to 57.0031%.

“As part of the company’s planned acquisition of (PDSHC), the company and Philam signed today an SPA whereby the company agreed to purchase and Philam agreed to sell 250,000 common shares of stock in PDSHC, equivalent to 4% of the total issued and outstanding stock of PDSHC,” PSE said in the disclosure.

The price of the acquisition is based on PDSHC’s total equity value of P2 billion, which pegs the price of each share at P320 each.

The PSE said P73.51 million of the acquisition price will be paid at the closing of the deal, while the remaining P6.49 million will be held in escrow.

The PSE has been continuously increasing its stake in the PDSHC as part of efforts to merge the two capital markets.

“For the market, the single exchange setup helps achieve efficiencies, reduce risks, and facilitate the development of new products,” the PSE said regarding its merger with the PDSHC.

In June, the local bourse purchased the Bankers Association of the Philippines’ 23.47% stake in PDSHC for P469 million. The PSE then signed an SPA with Whistler Technologies Systems, Inc. to buy 8% of PDSHC for P160 million in July, and subsequently bought the Investment House Association of the Philippines’ 0.5831% stake for P11.66 million.

Before the deal is closed, all the transactions would require approval from regulatory agencies such as the Securities and Exchange Commission, the Bangko Sentral ng Pilipinas, as well as the Philippine Competition Commission.

“The purchase is subject to certain closing conditions, which includes the grant by SEC of any exemptive relief to PSE to own more than 20% of an exchange and the approval of the relevant regulatory agencies pursuant to law, among others,” the PSE said.

Other shareholders of the PDSHC include the Singapore Exchange Ltd., which has 20%, San Miguel Corp. with 4%, the Development Bank of the Philippines with 3.08%, among others.

Earlier this month, the PSE said it will be taking a P1.15-billion loan to finance the purchase of remaining shares in the PDSHC.

The PSE’s net income attributable to the parent stood at P220.55 million in the January to June period, 26% lower year on year on the absence of nonrecurring income alongside an increase in expenses incurred by the company. Revenues, meanwhile, reached P662 million during the period.

Trading of PSE shares resulted to a 20-centavo or 0.08% decline in its price to P240.80 on Tuesday. — Arra B. Francia