THE Philippine Stock Exhange Inc. (PSE), the owner of the equities-trading market, said it does not intend to engage the government in a bidding war to buy PDS Holdings Corp., the company that owns the fixed-income trading platform.
PSE President and CEO Ramon S. Monzon said they still want to unify the two trading platforms under one roof, but things changed when state-owned Land Bank of the Philippines (LandBank) signified it intends to buy the same amount of shares the PSE wants to acquire.
“This is not a bidding war. I don’t think we should be engaging the government in a bidding war. We will be a laughing stock in the international community if the private sector and the government are outbidding each other,” Monzon said.
The PSE already has a share-purchase agreement (SPA) with several minority owners of PDS to acquire their shares of up to 72 percent of PDS, but it can only be done once it secured the regulatory approval for the acquisition.
LandBank wants to buy 66 percent of PDS, while the PSE also wants to acquire not less than 66 percent, since it intends to unify the two platforms. It is not clear, however, if LandBank wants to own a controlling stake in PDS or if it will be contented with a minority ownership.
Incidentally on Thursday, the PSE listed its P3- billion stock-rights offer, a move meant to bring down brokers’ ownership to 20 percent. The number of shares is needed for the PSE to get an exemptive relief from the government, allowing it to acquire PDS and merge the two platforms.
The PSE is yet to hurdle its biggest obstacle of complying with the 20-percent ownership cap for stockbrokers. The PSE already signed SPAs with the Bankers Association of the Philippines, Whistler Technologies, Financial Executives of the Philippines and San Miguel Corp. for a combined PDS ownership of 72 percent.
The other minority owners that the PSE does not have an agreement with include the Singapore Stock Exchange, and government-owned institutions LandBank, Development Bank of the Philippines and Philippine Deposit Insurance Corp.
The government, through these institutions, owns 4 percent of PDS.
Monzon said its agreements with the minority owners of PDS will expire by the end of the month.
“We could [extend the SPA] if we wanted to, but we don’t know if that’s the right thing to do. What is the extension for? What will change?” Monzon said. The PSE’s board of directors will meet on April 11 to discuss its next steps if the Securities and Exchange Commission does not grant them exemptive relief before the expiration of the SPAs.
Image credits: Alysa Salen