LANDBANK renews offer to buy PSE’s PDS stake

THE LAND BANK of the Philippines (LANDBANK) has offered to buy the Philippine Stock Exchange, Inc.’s (PSE) shares in the Philippine Dealing System Holdings Corp. (PDSHC) for nearly P282 million, according to the bourse operator.

“The offer of Land Bank is valid until 31 January 2019. The Company is studying the offer and will make a recommendation to the Company’s Board of Directors,” PSE said in a disclosure on Wednesday.

The proposed acquisition placed the value of the PDSHC shares at P215 each or for a total of P281,959,385 “subject to terms and conditions.”

This is 40% lower than the P360 per share offer (or a total of P472.11 million) that was initially approved by the LANDBANK board in January 2018.

PDSHC comprises the PDS Group along with subsidiaries Philippine Dealing & Exchange Corp., Philippine Depository &

Trust Corp., Philippine Securities Settlement Corp., and PDS Academy for Market Development Corp.

Based on the shareholder structure found in its website, the firm is 21% owned by the PSE. The biggest shareholder group, with a 28.9% stake, is made up of members of the Bankers Association of the Philippines and institutions.

LANDBANK, which has a universal banking license, is composed of a board of directors including Finance Secretary Carlos G. Dominguez III, Agriculture Secretary Emmanuel F. Piñol and Labor Secretary Silvestre H. Bello III.

In October last year, the state-led bank said it had hoped to secure the controlling stake in the fixed income bourse before end-2018, after lowering its share purchase offer.

Alex V. Buenaventura, LANDBANK president and chief executive officer, had said the lender revised its offer to P215 each based on the fixed-income exchange’s P980.61 million current net asset value.

The lender sought to take over the bond exchange operator after continued delays in the merger of the PDSHC with the PSE, plans of which started in 2013.

The PSE previously secured a 72% ownership of the bond exchange operator in early 2018, but failed to obtain exemptive relief from the Securities and Exchange Commission to waive the 20% single-industry ownership limit. Its share purchase agreements with various stakeholders lapsed in March.

The application was rejected because the PSE did not meet a requirement to dilute broker ownership in the equities exchange to less than 20%.

LANDBANK stepped in, saying it could improve the target firm’s financial position, and at the same time hasten the development of the capital markets.

On Wednesday, shares in PSE rose 0.11% to close at P180 each.