PSE has until Jan 31 to decide on Landbank offer

MANILA, Philippines — The Philippine Stock Exchange (PSE) has until Jan. 31 to decide on the offer of state-owned Land Bank of the Philippines, but officials hinted that the price should be higher. 

“It has to be a fair price,” PSE president Ramon Monzon said on the sidelines of the Bangko Sentral ng Pilipinas annual reception for the banking community last week. 

Landbank offered anew to buy the shares of the PSE in the Philippine Dealing System but this time, at a lower price of P215 per share compared to the P369 per share the government institution offered in April last year.

Another official said it was a puzzle how Landbank arrived at the new price. 

“I don’t know where the price is coming from,” the official said.

The PSE disclosed that it received a letter from Landbank “expressing interest to purchase the shares of the company in Philippine Dealing System Holdings Corp. (PDSHC) at P215 per share for a total purchase price of P281.96 million subject to certain terms and conditions.”

Monzon said the PSE is still studying the offer and would make a recommendation to the company’s board of directors. 

He said the PSE is still discussing the matter with other sellers. 

“We want to know what the other sellers want to do,” Monzon said. 

In April last year, Landbank offered to buy out PSE’s shares in PDSHC for P472.12 million, which was equivalent to P360 per share.

The PSE had a grand plan to acquire the PDS Group, the operator of the country’s fixed income exchange, but it was unable to proceed with the deal after it failed to get the necessary approvals from the SEC. 

The Securities Regulation Code (SRC), the corporate code in the country, imposed a 20 percent limit on ownership of an exchange by any industry or business limit on ownership of an exchange by any industry or business group since it took effect in 2000. 

Corporate regulators said that when the PSE first initiated its plan to acquire the PDS Group in 2013, it was aware that to gain ownership and control of PDS, it would have to comply with the ownership limitations imposed by the SRC, but the PSE did not comply. 

The Securities and Exchange Commission also raised the following concerns for PSE to address before it can acquire PDS. These include issues on the monopoly ownership by PSE of both the equity and fixed income exchanges; high depository fees; use of name on central depository (NOCD) and the clearing and settlement issues.

The PSE wanted to merge the two exchanges to be at par with global practices and to deepen the country’s capital markets.

Monzon said that in other jurisdictions, there is only one owner of both the stock exchange and the fixed income exchange.