PSE firm on P2.25B price for PDS buyout

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The Philippine Stock Exchange (PSE) stands firm on its P2.25 billion offer for the Philippine Dealing Systems Holding Corp (PDS Group) in a move to integrate the equities and fixed income securities trading in the country.

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“It’s the same valuation—P2.25 billion. Of course, some (stakeholders) want more, but we think that represents fair value,” PSE President and Chief Executive Officer Hans Sicat told reporters on the sidelines of the Asia Financial Summit.

“That’s our deal. So people can decide to monetize or people can decide to stay, it’s their choice,” Sicat said.

Sicat was apparently sending smoke signals to minority shareholder Singaporean Exchange Limited (SGX), which owns a 20 percent stake in PDS Group. SGX has been silent on PSE’s offer to buy PDS.

Sicat previously said PSE was “open” to possible upward revision of the pricing in a bid to woo the SGX into selling its PDS interests. The PSE Group has been courting minority shareholders to bring about the merger of the stocks and bond trading in the country.

“After this transaction, PDS will automatically become a subsidiary of the PSE. So if you’re there, if you are a shareholder who decides to stay, you will be a minority shareholder in the subsidiary of the PSE — you can take your chances,” Sicat said

The exchange has secured the 28.9-percent PDS stake of the Bank Association of the Philippines (BAP) and the 31.1 percent of other minority shareholders. But SGX refused to let go of its 20 percent stake, waiting for a hefty price for its investment.

Sicat said after the shareholders’ approval, which was scheduled on May 2, the PSE will proceed with the transaction whether or not the remaining shareholder will give in to the P2.25-billion pricing or not.

“After May 2, when shareholders will approve the terms…we think it will take two to three months to close the deal,” he said.

Before the merger and acquisition plans, PSE owned 20 percent of the PDS while the other stakeholders were BAP (28.9 percent), SGX (20 percent) and the other minority shareholders (31.1 percent).

The PSE is looking at transforming the system of the PDS into a “true auction market” in selling bonds to raise participation from traders and regulators across the table.

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