PSE rejects Landbank offer for stake in PDS

The Philippine Stock Exchange has rejected an offer from state-owned Land Bank of the Philippines to buy its stake in capital market infrastructure provider Philippine Dealing System Holdings Corp. at a reduced valuation.

The PSE board found Landbank’s offer of P215 per share or P281.96 million for its 20 percent stake too low, PSE sources privy to the discussions told the Inquirer.

A source said Landbank’s offer was discussed recently at a board meeting. “The decision was not to sell at this price.  It’s too low.  Our old offer was even higher,” one PSE source said.

When PSE itself was making a bid for PDS—the holding firm for fixed-income trading platform Philippine Dealing and Exchange Corp. (PDEx), Philippine Depositary and Trust Corp. and Philippine Securities Settlement Corp.—it had offered to buy out other shareholders at P320 a share.

The PSE is set to formally notify Landbank about its decision, the source said.

When Landbank first expressed interest to make a rival bid for PDS, its original offer was P360 per share.

Earlier this month, the PSE received a letter from Landbank with an offer at only P215 a share or P281.96 million for the whole bloc, subject to certain terms and conditions. The latest offer of Landbank —which is valid until Jan. 31 this year—was the one recently discussed by the PSE board.

Before Landbank entered the picture in 2017, the PSE had secured commitment from various shareholders, including the Bankers Association of the Philippines which held a 23.8-percent stake, that would give it 72 percent control of PDS.

By taking over PDS, the plan was to unify the country’s capital market infrastructure.

But not wishing to engage in a bidding war, much less to go up against a government-backed institution, the PSE dropped its bid last year.  This was even after raising P2.9 billion in fresh equity from a stock rights offering, proceeds from which were mostly intended to fund the PDS buyout.

The other key PDS shareholders are Singapore Exchange Ltd. (with a 20-percent stake); Tata Consultancy Services (8 percent); Computer Technology Services (8 percent); San Miguel Corp. (4 percent) and Financial Executives Institute (3.1 percent). Landbank owns 1.56 percent.