State-run Land Bank of the Philippines (LandBank) will be lowering its offer price for Philippine Dealing System Holding Corp. (PDSHC), citing a decline in the fixed income exchange operator’s net asset value.
“Basically it will be lower than P360 because we have to factor in the dividends they have declared,” LandBank President and CEO Alex Buenaventura told reporters Wednesday evening.
Some 43 percent of PDHSC shareholders have already agreed to sell following LandBank’s offer of P360 per share, which was much higher than the Philippine Stock Exchange’s proposed purchase price of P320.
The PSE, which last year appeared set to take over PDHSC, has since dropped its bid following regulatory hurdles and LandBank’s challenge.
Buenaventura did not disclose the bank’s new price offer but said they were in the process of crafting a response to the shareholders who agreed to sell their stakes.
“Our response to their acceptance letter will be a response on what will be the purchase price considering that they have declared dividends,” he said, adding that shareholders would be informed by next week.
Buenaventura explained that PDSHC recently declared P600 million in dividends, which weighed on its net asset value that was used as a basis for the bank’s offer.
“We made the P360 offer to buy based on the net asset value prior to their declaration of the dividends,” he said.
“The situation right now is that PDSHC’s net asset value got smaller that is why we cannot stick to the P360 original offer to buy per share,” he added.
This also means that the amount LandBank would have to raise to acquire 66.67 percent of PDSHC would be smaller than the initially estimated P1.5 billion.
Buenaventura has said that the state-owned bank wanted to take over PDHSC as the move was aligned with the government’s capital markets development program and was also a potentially profitable investment.
Bond issuances, he explained, would be fostered via the LandBank’s branches nationwide.
PDSHC is the parent company of Philippine Dealing & Exchange Corp. (PDEX), and Philippine Depository and Trust Co.
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.