Biz Buzz: A union of bourses
The bid of the Philippine Stock Exchange (PSE) to acquire the Philippine Dealing System Group (PDS)—for the purpose of consolidating the country’s capital market infrastructure—has regained momentum as the Bankers Association of the Philippines (BAP) seems amenable to the former’s offer based on an enterprise value of a little more than P2 billion (for 100 percent of PDS).
Recall that the discussions to acquire PDS—the holding firm for fixed-income trading platform Philippine Dealing and Exchange Corp. (PDEx), Philippine Depositary and Trust Corp. (PDTC) and Philippine Securities Settlement Corp. (PSSC)—were stalled by a court petition questioning the framework behind PDEx, which critics describe as a “monopoly.”
But PSE-PDS merger proponents decided that they would not wait for the case to be resolved before taking action as the court case could otherwise take forever.
From what we heard, it was pretty much a “done deal” within the BAP— with the acceptance of the PSE’s offer already upheld (not just in principle but explicitly affirmed through a formal voting, some bankers confirmed).
However, it seems that the PSE still needs to convince other key stockholders. As an independent audit commissioned by the BAP pointed out that PDS could be valued at around P4 billion, it seems that the PSE needs other shareholders to accept a lower offer from the PSE.
We heard that Singapore Exchange Ltd., for instance, while committed to the consolidation, has not yet accepted the PSE’s offer.
The PSE, which already owns 20 percent of PDS, needs to get at least two-thirds control of the latter to be able to merge these platforms. Together, the BAP-SGX team is a crucial bloc owning a combined 45 percent.
So why is the BAP willing to accept a lower price for its stake in PDS? The goal is apparently not to make money from this transaction but to contribute to capital market development by having a unified infrastructure. Doris C. Dumlao
Bullish H&M
The speculation could now stop as the date has been set.
If all goes according to plan, Swedish multinational retail-clothing company Hennes & Mauritz AB—more commonly known as H&M—will finally open its doors to Filipinos on Aug. 15, according to Trade Undersecretary Ponciano C. Manalo Jr.
Fresh from meeting executives in Sweden, Manalo said H&M was highly bullish of its prospects in the country as the company sees the Philippines as a big market given its huge population and robust economic growth. H&M, whose first store in the country will be located at the SM Megamall’s Fashion Hall, reportedly has big plans for the country over the next five to 10 years.
The fact that H&M is coming into the country on its own, without a local partner or a franchisee—and that it is the first fully owned international retail chain in the country—also says a lot about its strong and continuing confidence in the Philippine market.
H&M executives, according to Manalo, said: “We are going to the Philippines full blast.” Amy R. Remo
25 ‘ambassadors’
British ambassador Asif Ahmad, a diplomat who is conversant in Filipino, appears as the modern-day male version of Mary Poppins—complete with a Union Jack-themed bow tie and an umbrella—as he graces some billboards and print ads of property tycoon Andrew Tan’s Megaworld Corp.
On the occasion of its 25th anniversary, Megaworld has honored through a series of ad campaigns 25 “visionaries” who shared in the company’s own visions, and the British Embassy represented by the social media-savvy ambassador is one of them.
These visionaries have agreed to share their own visions in these print ads, brilliant way of enlisting brand ambassadors for free.
In the case of Ahmad, he represented the British embassy’s support for a sustainable world and taking part in a “green” community like Megaworld’s McKinley Hill. When the British Embassy (before Ahmad’s time) set up in this township, Alliance Global Group Inc. chief Kingson Sian noted that McKinley Hill was not yet developed. But the embassy believed in it, acquired the landbank of close to two hectares next to an old park, built a beautiful building and added prestige to the township.
“He’s more than happy to open his umbrella,” Sian said of Ahmad, who also has some affinity for the Alliance Global, which recently acquired the storied Scottish whisky maker Whyte & Mackay. Sian added that the ambassador himself conceptualized his portrait.
The honorees include pioneering residents in Megaworld’s townships and retailers/restauranteurs like Marvin Agustin, Ricky Laudico and Raymond Magdaluyo of the Sumosam group, Mr. Kurosawa, Akira and Marciano’s restaurants. Doris C. Dumlao
MNTC replies
The president of Manila North Tollways Corp. wrote the Inquirer last week to deny reports that they were favored by the Department of Public Works and Highways (DPWH) in the bidding for infrastructure projects in the past.
MNTC president and CEO Rodrigo Franco was referring to a June 13 Biz Buzz item, as well as the Inquirer’s editorial (PPP dilemma) of June 17.
“Your editorial said that ‘accommodations (were) extended by DPWH to other bidders in the past,’ specifically with regard to MNTC and our parent company, Metro Pacific Investments Corp. (MPIC).”
“Biz Buzz reported that MPIC ‘supposedly submitted a wrong bid.’ Both statements are completely false,” he said. “No accommodation was ever granted to either MNTC or MPIC in the bidding for Naia Expressway or any other public bidding.”
“Further, MNTC’s bid for Naia Expressway was fully compliant as we submitted a bid security that irrevocably authorized DPWH to make only one drawing under a letter of credit that adopted in to the form of the bid security prescribed by the instructions to bidders for the project dated Oct. 30, 2012, as amended by supplemental bid bulletin No. 16 dated March 19, 2013.” Daxim L. Lucas
Unconvinced
No amount of explanation can placate the livid San Miguel Corp. camp, it seems, after they were disqualified by DPWH for the highly coveted Cavite-Laguna Expressway project, after what the conglomerate said was a mere “typographical error.”
The conglomerate now believes that DPWH officials merely made a show of asking them to clarify the typo on their P20.1-billion bid—which was about P8.5 billion more than the next bidder—before summarily rejecting explanation that the required bid bond was indeed good for a full 180 days (and not four days short as the typo suggested).
Word on the street is that SMC is now itching to sue some officials for graft. Abangan. Daxim L. Lucas
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