The Philippine Stock Exchange has firmed up a plan to offer about P2.5 billion in fresh capital through a follow-on equity offering, mandating BDO Capital & Investment Corp. to arrange an equity deal within this year.
Sources at the exchange said the PSE board had approved in a meeting on Wednesday the mandate for BDO Capital to underwrite the offering.
Asked about this, BDO Capital president Eduardo Francisco said in a text message: “We are helping PSE to ensure they meet ownership rules of groups.”
Francisco estimated that the PSE’s offer size would range between P2.5 billion and P3.5 billion.
It was earlier disclosed that the PSE was planning to issue a maximum of 11.5 million common shares out of the unissued portion of its authorized capital stock, which would dilute the cumulative ownership of trading participants.
The follow-on offering of shares is part of the PSE’s compliance plan to align the shareholder ownership with the limits set by the Securities and Regulation Code. Proceeds of the offering will be used to fund the acquisition of PDS and for the working capital requirements of the exchange.
A PSE source privy to the initiative said trading participants would not subscribe to the fresh equity offering. As to whether other institutional investors in PSE would be allowed to subscribe, the source said this would still have to be clarified.
Meanwhile, the PSE has withdrawn a petition filed with the Philippine Competition Commission (PCC) to clear its proposed takeover of PDS to update ownership levels.
“The official status has been withdrawn so they will refile it,” PCC Commissioner Stella Luz Quimbo said.
PCC is the country’s antitrust body which is mandated under the Philippine Competition Act to review mergers and acquisitions to ensure that these deals will not prejudice the interest of the consumers. The PCC is mandated to review deals related to Philippine assets valued at P1 billion.
The PSE is bidding to buy out other shareholders of PDS based on an adjusted equity value of P2 billion for 100 percent of PDS.