PSE targets PDS deal in ‘next few weeks’

The Philippine Stock Exchange, Inc. (PSE) hopes DQHZ WR ¿QDOL]H WHUPV IRU LWV takeover of the Philippine Dealing System Holdings Corp. (PDS) as early as next month.

³7KH JDPH SODQ LV WR basically have a formal signing of the deal, which can happen in the next few ZHHNV ´ 36( 3UHVLGHQW DQG &KLHI ([HFXWLYH 2I¿FHU +DQV % 6LFDW VDLG LQ D PHGLD EULH¿QJ LQ 0DNDWL &LW\ ODWH Friday.

³:H¶OO EH VLJQLQJ WKH term sheet, which is really at the end of the day a pretty GHWDLOHG YHUVLRQ ´ 0U 6LFDW added, noting the PSE must secure approval of the Securities and Exchange Commission (SEC) and the Philippine Competition Commission thereafter to close the deal.

The PSE, which already has a 20.98 percent stake in the PDS, has long pushed for the integration in line with other Southeast Asian exchanges that facilitate the trading of both equities DQG ¿[HG LQFRPH VHFXULWLHV With the backing of the government, the PSE started talks to buy out other PDS shareholders in early 2013.

The SEC, however, rejected in March last year the equity bourse’s application to be exempted from the 20 percent limit set by Republic Act No. 8799, or The Securities Regulation Code, for any business group in owning the controller of an exchange.

As a result, the PSE failed to consummate share purchase agreements with WKH %DQNHUV $VVRFLDWLRQ of the Philippines, Finex Research and Development Foundation, Inc., Whistler Technology Services, Inc. and Insular Investment Corp, which then cumulatively owned a 40.06 percent stake in PDS.

³:H¶UH PRUH FRQ¿GHQW than last time because: one, we’ve been talking this with them for the last nine months now, so there have been a lot more back-and-forth. I think also the signals are there, let’s call it senior support IURP YDULRXV VWDNHKROGHUV ´ Mr. Sicat said.

In disallowing the merger last year, the SEC raised the failure of the PSE to SUHVHQW ³FOHDU DQG FRQYLQFLQJ HYLGHQFH´ WKH DFTXLVLWLRQ will not negatively impact the ability of PDS to operate in public interest, among other concerns.

The SEC nevertheless remained open to reconsidering the integration of the PSE and PDS. In this light, the equities bourse revived its bid to acquire PDS in August 2016.

³:H¶UH ZRUNLQJ ZLWK the regulators with constant updates but we also agreed WKDW WKH ¿QDO IRUP ZLOO EH dependent on the commercial DJUHHPHQW ´ 0U 6LFDW VDLG noting the PSE and PDS only have one to two technical issues left unresolved.