Com­pe­ti­tion watch­dog says PSE with­drew no­tice for PDS merger

Business World - - CORPORATE NEWS - By Arra B. Fran­cia Re­porter

THE COUN­TRY’S com­pe­ti­tion watch­dog on Wed­nes­day said the Philip­pine Stock Ex­change ( PSE) has with­drawn the no­ti­fi­ca­tion for a re­view of its planned merger with the Philip­pine Deal­ing Sys­tem Hold­ings Corp. (PDS group).

Philip­pine Com­pe­ti­tion Com­mis­sion ( PCC) Com­mis­sioner Stella Luz A. Quimbo said the PSE has with­drawn its no­ti­fi­ca­tion last Sept. 4 since they have yet to com­ply with the re­quire­ments be­ing asked by the PCC.

“This was af­ter a con­sul­ta­tion with the PCC af­ter we is­sued a re­quest for more in­for­ma­tion af­ter we moved into Phase 2. So they made a de­ter­mi­na­tion that they need more than 60 days to com­ply with that. So they de­cided that in­stead of just ask­ing for the usual 15 to 30-day ex­ten­sion, that they would just re­file,” she told re­porters in Or­ti­gas on Wed­nes­day.

The PSE had ini­tially filed the no­tice for a re­view of its P2-bil­lion deal with the PDS Group last May 19. Un­der Re­pub­lic Act No. 10667 or the Philip­pine Com­pe­ti­tion Act, the PCC is tasked to re­view trans­ac­tions val­ued at over P1 bil­lion to en­sure that they do not en­gage in anti-com­pet­i­tive prac­tices.

“Based on the in­for­ma­tion re­quest of PCC and con­sis­tent with the rules of the law due to the ad­di­tional ac­qui­si­tion in PDS, the PSE deemed it ap­pro­pri­ate and ef­fi­cient to file anew with the PCC to in­cor­po­rate re­cent de­vel­op­ments and ad­dress other queries,” PSE Chief Op­er­at­ing Of­fi­cer Roel A. Re­fran said in a text mes­sage when sought for com­ment. Mr. Re­fran said the PSE will likely re­file within the week.

The re­view of the trans­ac­tion will be con­ducted in phases, with the first phase to last at a max­i­mum of 30 days and is at priced at P250,000. Should the PCC need more in­for­ma­tion to re­view the deal, it would pro­ceed to Phase 2, priced at a frac­tion of 1% of the trans­ac­tion value, and will last for a pe­riod of 60 days.

Ms. Quimbo de­clined to give specifics on the ad­di­tional in­for­ma­tion re­quested from the PSE, but noted that it mostly cen­ters on the trans­ac­tion’s ef­fects on op­er­a­tions.

“It’s re­ally more de­tails on the op­er­a­tions, to en­sure that there’s no sub­stan­tial im­pact on com­pe­ti­tion in the mar­ket, and the pos­si­ble ef­fi­ciency gains from the trans­ac­tions,” Ms. Quimbo said.

Once the PSE re­files the no­ti­fi­ca­tion for re­view, the PCC will start with the first phase again.

Ms. Quimbo said the PSE did not in­di­cate when they plan to re­file the no­tice.

PSE of­fi­cials were not im­me­di­ately avail­able for com­ment.

Clear­ance from the PCC is part of the reg­u­la­tory ap­provals the PSE needs to pro­ceed with its merger with the coun­try’s fixed in­come bourse, a deal it has been work­ing on since 2013 in or­der to achieve syn­er­gies in op­er­a­tions for the two cap­i­tal mar­kets.

The PSE is cur­rently tar­get­ing to bring down bro­ker own­er­ship to 20% in or­der to se­cure ap­proval from the Se­cu­ri­ties and Ex­change Com­mis­sion, which im­poses a 20% sin­gle in­dus­try share own­er­ship limit.

Last Au­gust, the PSE an­nounced it will sell up to 11.5 mil­lion shares as part of ef­forts to de­crease the own­er­ship of trad­ing par­tic­i­pants in the com­pany. It is also in the process of de­clas­si­fy­ing in­ac­tive bro­kers, which will help bring down bro­ker own­er­ship from the cur­rent 27.9% to around 23% to 24%.

Shares in PSE were un­changed on Wed­nes­day, clos­ing at P236 apiece.

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