State-run Land Bank of the Philippines (LandBank) said it would need about P1.5 billion to acquire control of Philippine Dealing System Holding Corp. (PDSHC).
“If we buy 66.67 percent [of PDSHC]that will be equivalent to 4.167 million shares. If we buy at P360 per share, that will be a total buying amount of P1.5 billion,” LandBank President and CEO Alex Buenaventura told reporters.
The bank’s board of directors last week approved the P360 per share purchase price, which Buenaventura said would be sourced “from our own existing capital because for LBP, this will be an investment into a financial allied undertaking.”
He said the bank would begin accepting offers today with an April 5 deadline.
“With respect to the offer period, I said we cannot keep the development of the financial markets waiting, LBP is serious and we intend to move fast. We plan to lock this deal up in 30 days,” he said.
Buenaventura added that LandBank had also engaged the Development Bank of the Philippines as financial adviser for the transaction.
He also claimed that the state-owned lender was offering much higher than the Philippine Stock Exchange’s (PSE) P320 per share.
“We are paying in cash unlike PSE’s offer of paying in shares. I think we have a very much more attractive offer,” Buenaventura said.
Buenaventura said the acquisition of PDS would not only serve as a potentially profitable investment but was also aligned with the government’s capital markets development program.
Bond issuances, he added, will be fostered via the bank’s branches nationwide.
“Our account officers will be talking to the bank’s SMEs (small and medium enterprises) borrowers to raise capital by issuing corporate bonds.”
LandBank, which currently owns 1.56 percent of PDS through the Bankers Association of the Philippines (BAP), is looking to derail the PSE’s ongoing push to consolidate control over the operator of country’s fixed income bourse.
The PSE’s planned takeover of PDS has already been cleared by antitrust regulators but not the Securities and Exchange Commission.
Finance Secretary Carlos Dominguez recently called out the PSE for taking too long to assume control and warned that the government could step in to achieve the aim of developing the country’s capital markets.
PDS is the parent company of Philippine Dealing & Exchange Corp. (PDEX), and Philippine Depository and Trust Co. (PDTC).
PDEX is the dealing exchange for fixed income securities while PDTC acts as depository and registry for participants for both fixed income and equity securities.