ThE total acquisition cost of the 66.67-percent common shares of the Philippine Dealing System Holdings Corp. (PDS) at P360 per share will reach P1.5 billion, the Land Bank of the Philippines (LandBank) recently disclosed.
LandBank President Alex V. Buenaventura said the bank will use corporate funds or existing capital for the purchase of the PDS shares.
“There are 6.250 million shares total; if we buy 66.67 percent, that will be equivalent to 4.167 million shares. If we buy at P360 per share, that will be a total buying amount of P1.5 billion,” Buenaventura told financial reporters.
Last week LandBank’s Board of Directors approved the proposal to purchase at least 66.67 percent of the common shares of PDS at P360 per share.
“Our offer of P360 per share is 12.5 percent higher than the PSE [Philippine Stock Exchange] offer of P320 per share. LandBank’s acquisition of PDS will not only serve as a potentially profitable investment but is also, more important, aligned with the government’s capital markets development program,” he added.
In January this year, state-owned LandBank said it has started its own due diligence audit of the PDS, days after the PSE made known its plan to acquire the PDS.
LandBank’s plan to acquire more than three-fifths of PDS rivals the PSE’s proposed merger with the fixed income market.
Landbank currently owns 1.56 percent of PDS through the Bankers Association of the Philippines, while the PSE has 69.03 percent of the shares after signing a series of share purchase agreements with stakeholders.
Finance Secretary Carlos G. Dominguez III said the LandBank’s proposal to acquire PDS will help promote the use of corporate bonds by small and medium industries in terms of tapping the capital markets.
“We believe that the LandBank offer is generous and aggressive,” Dominguez said.
Buenaventura earlier said that LandBank has long ago started its due diligence for the transaction and is currently in the process of securing the necessary regulatory approvals of the acquisition. This includes the application for regulatory relief from the Securities and Exchange Commission (SEC).
“When we decided to offer to acquire, we already submitted to SEC an application for exemption from the 20-percent cap,” he added.
Under the Securities Regulation Code, or Republic Act 8799, no single industry can exceed 20-percent ownership in an operating exchange.