PSE seals P2.32-B deal to take over PDS

Updated on December 27, 2024 at 8:05 a.m.

After seven years, the Philippine Stock Exchange Inc. (PSE) has again reached several agreements with the Bankers Association of the Philippines (BAP) and other shareholders to take over the country’s bond trading platform for P2.32 billion, allowing for a unified marketplace for the trade of securities.

In a regulatory disclosure after the close of trading on Thursday, the PSE said it had signed agreements to buy the shares of BAP, Singapore Exchange Ltd. (SGX), Whistler Technologies Services Inc. (WTSI), San Miguel Corp. (SMC), Investment House Association of the Philippines (IHAP), Golden Astra Capital Inc. and Mizuho Bank Ltd. in Philippine Dealing System Holdings Corp. (PDS).

The transaction involves 3.87 million PDS shares valued at P600 each.
READ: All eyes on rekindled PSE bid to unify capital markets

Once finalized, the PSE will own 82.9 percent of PDS, which operates Philippine Dealing and Exchange Corp., Philippine Depository and Trust Corp. and Philippine Securities Settlement Corp.

This marks a historic milestone for the operator of the local bourse, as this would allow the Philippine capital market to have only a single marketplace for both fixed-income and equities.

“These signed agreements bring us a step closer to achieving our objective of consolidating the equities and fixed income exchanges and realizing the synergies and efficiencies from this unified setup,” PSE president Ramon Monzon said in a statement.

“This will also allow us to be instrumental in the growth and development of the Philippine capital market with the introduction of new products for various stakeholders as well as the implementation of risk management processes,” Monzon added.

Selling shareholders

BAP, which consists of at least 20 local banks and 24 foreign bank branches, agreed to sell up to 1.8 million of its common shares in PDS, representing a 28.83-percent stake.

BAP and its member banks have the largest stake in PDS.

Other shareholders agreed to sell the following to PSE: SGX, 1.25 million common shares (20 percent); WTSI, 500,000 shares (8 percent); SMC, 250,000 shares (4 percent); IHAP, 40,672 shares (0.65 percent); Golden Astra, 22,536 shares (0.3606 percent); and Mizuho, 5,000 shares (0.08 percent).

At present, the PSE already owns nearly 21 percent of PDS.

The PSE nearly completed its takeover of PDS in 2017 after BAP had agreed to sell its shares in a deal that valued the bond trading platform at P2.2 billion.

However, the Securities and Exchange Commission (SEC) blocked the merger deal, saying that it would breach the 20-percent ownership cap under the Securities Regulation Code.

But in November last year, the SEC commission en banc reversed this decision and allowed the bourse to apply for exemptive relief.

To avoid regulatory complications this time around, the PSE first got the SEC’s approval prior to finalizing the deal. INQ