The Philippine Stock Exchange Inc. (PSE) is aiming to secure more Philippine Dealing Systems Holdings Corp. (PDS) shares in its bid to merge domestic stock and bond trading under one platform.
“We are optimistic and excited about the benefits that this landmark transaction can bring to the market and we appreciate the support from all the stakeholders,” PSE President and Chief Executive Officer Hans B. Sicat said in a statement.
The PSE has been pushing to close share purchase agreements (SPAs) with the minority stakeholders of PDS. To date, the deals will give the bourse 61.06 percent of PDS.
The PSE has signed four SPAs from shareholders: one for a 28.91 percent PDS stake from the Bankers Association of the Philippines (BAP) for P650.55 million, 3 percent from Finex Research and Development Foundation Inc. for P69.39 million, 8 percent from Whistler Technologies Services Inc. for P147.204 million, and 0.06 percent from Insular Investment Corp. for P1.186 million.
The deals are still subject to approval by the Securities and Exchange Commission (SEC), which has yet to decide on a PSE petition that it be exempted from a rule limiting an individual entity’s ownership in a bourse to 20 percent.
“We have had numerous discussions with the Department of Finance, the BSP (Bangko Sentral ng Pilipinas) and the SEC on this matter. We look to them to support this process of consolidating the equities and fixed income exchanges which will further align the Philippine capital markets with the global markets,” Sicat said.
Approval of the PSE’s petition for exemptive relief will allow it to take full control of PDS.
The SEC has said that it was studying the proposed merger carefully to avoid post-acquisition problems, considering that the new Philippine Competition Act does not agree with having a single entity owning the two exchanges.
PDS is the parent firm of Philippine Dealing and Exchange Commission, which operates as an exchange for the trading of fixed income securities such as corporate debt notes or bonds.
Before the merger and acquisition plans, PSE owned 20 percent of the PDS while the other stakeholders were the BAP (28.9 percent), the Singapore Stock Exchange (20 percent) and other minority shareholders (31.1 percent).