Land Bank clinches purchase of PSE’s stake in PDS
State-run Land Bank of the Philippines is expected to sign this week an agreement to acquire the Philippine Stock Exchange’s (PSE) stake in the Philippine Dealing System Holdings Corp. (PDS Group).
Finance Secretary and Land Bank Chair Carlos G. Dominguez III said that “it is to be hoped” the PSE will sign and submit the non-disclosure agreement today, which will pave the way for the signing of the share purchase agreement before the end of this week.
“The non-disclosure agreement is necessary to begin the serious discussion between Land Bank and PSE,” Dominguez told the Manila Bulletin in a phone interview. “We’ve been waiting for it since last week and the PSE was supposed to give it last Thursday.”
Sought for comment, Alex V. Buenaventura, Land Bank president and chief executive said that the PSE is seriously keen on selling its 20.98 percent shareholding in PDS to the state-owned lender.
Buenaventura also hopes the nondisclosure agreement, which is one of the prerequisites asked by the lawyers at the Department of Finance (DOF), will be submitted by the PSE to Land Bank today.
“That’s a legal requirement of our lawyers at the DOF because the details of our offer to buy are highly confidential between the buyer and seller,” the Land Bank chief said.
“Once we have the nondisclosure agreement, we will give our firm offer then we will have the share purchase agreement a few days later,” he added.
In April, the PSE abandoned its plan to take control of the country’s fixed-income exchange after its timetable to close purchase agreements with key PDS shareholders lapsed last March 31.
Buenaventura said that Land Bank expects other PDS shareholders will also decide to sell to the state-run lender once the purchase agreement with the PSE is sealed later this week.
“We just hope that after PSE shows the way, other shareholders will follow,” the Land Bank chief said, adding the R360 a share offer to PDS shareholders was also maintained.
Lank Bank made an offer in April to all shareholders of PDS to buy 4.167 million common shares in the bond exchange — equivalent to a 66.67 percent stake — worth R1.5 billion. The offer period lapsed last May 20.
Other PDS shareholders include the Bankers Association of the Philippines, Whistler Technologies Services, Inc., Investment House Association of the Philippines, The Philippine American Life and General Insurance Co., FINEX Research and Development Foundation, Inc., San Miguel Corp., and Tata Consulting Services Asia-Pacific Pte. Ltd.
Dominguez earlier said the government was willing to establish its own bond exchange should the negotiations between Land Bank and PDS shareholders to buy a controlling stake in the latter fails.
“If they don’t want to sell, it will be very clear now who doesn’t want to develop the capital market, and who are those shareholders of PSE and PDS,” Dominguez said.