PSE, BAP reach deal on sale of PDS stake

MANILA, Philippines — The Philippine Stock Exchange Inc. (PSE) has reached an agreement with the Bankers Association of the Philippines (BAP) and certain member-banks for the sale of their shareholdings in the Philippine Dealing System Holdings Corp. (PDS).

The PSE said it entered last Tuesday into a share purchase agreement (SPA) with BAP, for itself and on behalf of BAP Data Exchange Inc. and certain member-banks, to acquire 1.16 million common shares equivalent to an 18.62-percent interest in PDS.

A term sheet was signed by the PSE with the BAP, for itself and on behalf of BAP Data Exchange and certain member-banks, in late December last year.

Under the term sheet, BAP agreed to sell up to 1.8 million common shares, equivalent to 28.83 percent of the total issued and outstanding stock of PDS.

With all the SPAs signed with various shareholders and the term sheet inked with Mizuho Bank Ltd., the PSE is now set to purchase a total of 3.58 million common shares of PDS for P2.15 billion.

The shares to be acquired by the PSE, equivalent to 57.25 percent, will be added to the company’s existing 20.98-percent stake in PDS, bringing its ownership to 78.23 percent.

So far, the PSE said that the Singapore Exchange Ltd, Whistler Technologies Inc., San Miguel Corp., Golden Astra Capital Inc., Financial Executives Institute of the Philippines Research and Development Foundation and Investment House Association of the Philippines have fulfilled all closing conditions for the sale of their shareholdings in PDS equivalent to 34.55 percent.

The transactions are part of the PSE’s plan to acquire up to 100 percent of PDS, to align the Philippine capital market with other markets globally which have a single exchange structure for fixed income and equities.

It also seeks to provide investors with a facility to trade fixed income, equities and other products in a unified marketplace.

The PDS is the holding company that owns the Philippine Dealing and Exchange Corp., the operator of the fixed income exchange. It also owns the Philippine Depository and Trust Corp., which serves as the depository for equities and fixed income securities.

The PSE has yet to enter into an SPA with is Tata Consultancy Services Asia Pacific Pte. Ltd. Tata Consultancy, which has an eight-percent stake in PDS.

PSE president and CEO Ramon Monzon, however, earlier said that attaining the goal of consolidating the equities and fixed income exchanges could be achieved even without the PSE having 100 percent ownership in PDS.

“It is possible to consolidate both exchanges without full ownership of PDS. We only need a majority stake of 51 percent to do this,” Monzon said.