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PSE bares plan to acquire 95% of bond exchange

The Philippine Stock Exchange plans to acquire as much 95 percent of Philippine Dealing System Holdings Corp., the operator of the country’s markets for fixed-income securities and foreign exchange.

PSE president Hans Sicat said in an interview at the sidelines of the Asean Capital Markets and Investment Summit the local bourse was just waiting to secure “exemptive relief” from the Securities and Exchange Commission before proceeding with the acquisition of a majority stake in PDS Holdings.

PSE was seeking an exemptive relief from the SEC, as the Securities Regulation Code provided that no single industry or business group should own more than 20 percent of an exchange.

“The share purchase agreement is all set. We are just waiting for the SEC’s approval for the exemptive relief,” Sicat said.

“We are confident we can make the minimum 67-percent super majority. But we think we can get probably 94 to 95-percent stake,” Sicat said.

The PSE reached agreement with the Bankers Association of the Philippines in July to acquire the latter’s 1.81 million shares, or 28.91 percent, of PDS Holdings.

Under the agreement, PSE would pay the BAP, which represents some of the biggest banks in the country, some P650.55 million.  This would value PDS Holdings at P2.25 billion.

Other PDS shareholders who expressed intention to sell their shares to the PSE were the Bankers Association of the Philippines, San Miguel Corp., Golden Astra, Tata Consultancy Serves Asia, Computershare Technology Services, The Philippine America Life and General Insurance Co., Financial Executive Institute of the Philippines, Social Security System and  Investment House Association of the Philippines.

Sicat said PSE was also in talks with Singapore Stock Exchange, one of the biggest shareholders of PDS Holdings, to acquire the latter’s 20-percent stake in the bond exchange.

Sicat said he expected to to complete the deal within the month.

The buyout by PSE of PDS shareholders will pave the way for the merger of the equites and fixed-income exchanges. To finance the acquisition, the PSE obtained P1.15-billion five-year facility from several banks.

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