THE Philippine Stock Exchange (PSE) does not want to engage in a bidding war with state-owned Land Bank of the Philippines for the acquisition of the country’s fixed-income bourse.
With share purchase agreements (SPAs) with several institutions set to expire at the end of this month, PSE President and CEO Ramon Monzon indicated that the exchange could abandon its bid to take over the Philippine Dealing System (PDS).
“We still want to unify. But look at the developments. Obviously, Land Bank is pursuing it so that’s not a unification [of the equities and bond exchanges]but of course they are entitled,” Monzon said at the sidelines of the PSE’s listing of a stock rights offering.
Asked if the PSE would be seeking extensions of the SPAs, he replied: “We could [ask for an extension]if we wanted to but we don’t think that’s the right thing to do,”
“What will change?,” Monzon added.
The PSE is offering to buy PDS shares at P320 apiece but Land Bank has dangled a much higher price of P360 apiece.
SPAs signed last year by the bourse cover around 67 percent of PDS. The deals were inked with the Bankers’ Association of the Philippines, Whistler Technologies Services, Inc., Investment House Association of the Philippines, The Philippine American Life and General Insurance, Co., FINEX Research and Development Foundation, Inc., and San Miguel Corp.
PSE’s planned acquisition is worth more than P2 billion and has already been cleared by the Philippine Competition Commission. It is now awaiting the Securities and Exchange Commission’s (SEC) issuance of exemptive relief.
Land Bank, meanwhile, is eyeing at least 66.67 percent ownership of the bond market. It has found an ally in Finance Secretary Carlos Dominguez 3rd, who has criticized the PSE for taking too long to consolidate its takeover.
The PSE rights offering, which raised more than P2.9 billion, was aimed at funding the PDS purchase.
It also allowed the bourse to cut the ownership share of brokerages to 21.38 percent, albeit still higher than the 20 percent required by the SEC for its approval of the PDS takeover.
Monzon said that this would be cut to 19 percent once the bourse moves to revoke the licenses of dormant brokers.
Also on Thursday, the PSE declared worth P50 million of cash dividends to shareholders as of record March 21, 2018, payable on April 23, 2018.