The Philippine Stock Exchange is revising its P2.25 billion offer price for the stakes in the Philippine Dealing Systems Holdings Corp (PDS Group) held by the Singaporean Exchange Ltd. (SGX) and the Bankers Assocation of the Philippines (BAP) and will present its new bid in the “next few weeks.”
The SGX owns 20 percent while the BAP holds 28.9 percent of the PDS Group.
PSE President and Chief Executive Hans Sicat told reporters in a press briefing on Monday the SGX is just “waiting for the adjusted term papers” from the PSE to be able to sell its stake in the PDS Group.
“We are finished with the due diligence. They are just waiting for the adjusted offer [to come]in the next few weeks. I’m not sure if they are convinced yet [with the move]. But I think they will review it,” Sicat said, referring to the prospects of the SGX giving in to the local bourse’s offer to revise the P2.25 billion amount to buy out the whole PDS Group.
The PSE has been eager to acquire 100 percent of the PDS Group to merge equity trading and fixed income bond dealings in one platform. The exchange has already courted the BAP and other minority shareholders for the purpose.
“I think the reality is that once we give the updated term sheet, it will make it easier [to acquire 100 percent of PDS]— we think we will get at least two-thirds. Any minority right now might feel they do not have a strong voice in controlling the company,” Sicat said.
To date, the PSE has a 54.24 percent interest in the PDS, which is still below the mandated 67 percent shareholding to be able to take control of a company, according to corporate laws.
Sicat said the PSE has been focused on its target of having two-thirds or controlling interest in PDS Group to be able to merge the two trading platforms instead of only operating the bond trading platform as a subsidiary.
Before the acquisition plans, PSE owned 20 percent of the PDS while the other key stakeholders were BAP (28.9 percent), and SGX (20 percent), with minority shareholders holding the remaining 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, Sicat said.
In 2014, the PSE recorded a 2.7 percent increase in its net income to P867.55 million from P844.77 million in 2013. Operating revenues and other income likewise went up by 4.1 percent to P1.71 billion, despite close-to-flat gains from listings last year.
Aside from Global Ferronickel Holdings Inc’s. anticipated P32-billion follow-on offering, expected market debuts in 2015 include the initial public offerings of Company of Friends Inc. (P7.7 billion), Gweilo Corp. (P75 million), Crown Asia Chemicals Corp (P200 million), and Green Power Panay Philippines Inc. (P290 million), as well as the backdoor listings of National Book Store Inc. via Vulcan Industrial Mining Corp., and possibly JDVC Resources Corp. through Island Information and Technology Inc., although negotiations between the two companies are reportedly still ongoing.