PSE raises stake in PH Dealing System to nearly 50%

MANILA, Philippines — The Philippine Stock Exchange has signed a deal to buy the 28.91 percent stake held by the Bankers Association of the Philippines and some member-banks in Philippine Dealing Systems Holdings Corp., raising its stake in this capital market infrastructure provider to nearly 50 percent.

The deal is the first step in the consolidation of the PSE and the PDS. The next step is for the PSE to make a general offer to other shareholders of PDS with the goal of reaching two-thirds voting rights – enough to execute the merger and unite the country’s bond and equity bond markets under a single platform.

“Capital markets will grow faster and bigger with one platform. There are cost-efficiency, speed, research and development advantages,” Lorenzo Tan, president of the Bankers Association of the Philippines, said in a text message. Tan is also president of Rizal Commercial Banking Corp.

In a disclosure to the Philippine Stock Exchange on Wednesday, the PSE said it had agreed with BAP on the indicative terms and conditions for the acquisition of PDS, which was valued in this deal at P2.25 billion out of which the proportionate interests held or represented by BAP amounted to about P650 million.

PDS Group is 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.

The disclosure said the agreement would be finalized after the satisfactory completion of the due diligence to be conducted by the PSE on PDS. The purchase is also conditioned on compliance with regulatory, corporate and other related requirements.

The PSE and BAP target the completion of the transaction on or before Dec. 29 this year during which the parties expect to execute the definitive agreements.

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