Finance chief nixes PSE req’t on PDS deal

Finance Secretary Carlos Dominguez has expressed reservations over a condition set by the Philippine Stock Exchange (PSE) before it signs a share purchase agreement (SPA) with the Land Bank of the Philippines for the 20.98 percent shareholding of the bank in the Philippine Dealing System Holding Corp. (PDSHC).

The signing of the SPA was scheduled this week, but Dominguez said the PSE has requested that the Bankers Association of the Philippines (BAP) should be present at the signing of the SPA.

“I heard they are supposed to sign. Now, the PSE wants to sign together with the BAP. We will sign with the shareholder. BAP is not a shareholder, so why are you putting so many conditions when, in fact, it’s just a share purchase agreement?” Dominguez said.

The PSE last week submitted to Landbank a nondisclosure agreement (NDA), a pre-requisite set by the bank to start discussions on the PDS deal.

Dominguez has asked Landbank to secure NDAs with other shareholders who are interested to sell their stake in PDSHC.

“That’s what I told Alex (Landbank president Alex Buenaventura). We have to get NDAs for all shareholders who want to sell,” he said.

Landbank earlier expressed its intent to buy in cash the 66.67 percent common shares of PDSHC at P360 apiece.

Buenaventura said this was equivalent to 4.167 million shares valued at P1.5 billion. He said Landbank would pay the amount from its existing capital.

PDSHC has a total outstanding shares of 6.25 million. The PSE owns 20.98 percent of the total outstanding shares followed by the Singapore Exchange Ltd. with 20 percent, the Bankers Association of the Philippines (BAP)—for itself and as trustee of its member-banks—with 13.26 percent, BAP—other memberbanks—with 9.78 percent, Tata Consultancy Services Asia-Pacific Pte. Ltd. with eight percent, among others.

Landbank, for its part, owns 1.56 percent of the company through the Bankers Association of the Philippines. If it successfully acquires at least 66.67 percent of the fixed income bourse, its stake would increase to 68.23 percent.

Buenaventura earlier said acquiring the majority control of PDSHC would help strengthen the financial position of the bank, and contribute to the development of the domestic capital market.