Land Bank plans to acquire SGX shares in PDSHC

State-run Land Bank of the Philippines has formally expressed interest to acquire the stake of Singapore Exchange Ltd. (SGX) in the Philippine Dealing System Holdings Corp. (PDSHC).

In a letter dated March 13, 2018 to Philippine Stock Exchange (PSE) President and Chief Executive Officer Ramon Monzon, Alex Buenaventura, Land Bank president and chief executive said the state-owned lender is interested to acquire SGX’s 20 percent stake in PDSHC at R360 per share.

“This offer is valid for a period of 30 days from the seller’s receipt of this letter,” Buenaventura’s letter obtained by reporters read.

Buenaventura also said the offer purchase price “shall be without preju- dice to any change which the Board of Directors of the Offeror (Landbank) may implement and to any subsequent negotiations by the Parties”.

He added that Landbank “has sufficient funds” to pay SGX’s stakes in PDSHC and “at this time, no financing contingency is expected to be associated with the execution of the transaction.”

SGX’s 20 percent stake in PDSHC is equivalent to 1.25 million shares, making it the second largest shareholder of the holding firm after the PSE, which owns 20.98 percent.

Buenaventura earlier disclosed that they have offered to buy the stakes of some PDSHC holders and the offer period runs from March 5 to April 5, 2018, with total acquisition cost for the 66.67 percent stake placed at P1.5 billion.

He said Land Bank would pay PDS shareholders in cash.

PSE has already offered to buy the shares of other PDSHC stakeholders at P320 per share but has yet to consummate the agreements.

“In the LBP Board Meeting held on 27 February 2018, the Board of Directors approved LBP's proposed offer to purchase at least 66.67 percent of total PDSHC common shares at P360 per share,” Buenaventura said last month.

Based on the filing with the PSE, PDSHC’s outstanding common shares stood at 6.25 million. With LandBank’s plan to acquire 66.67 percent stake in the company, that would entail 4.167 million shares, equivalent to around P1.5 billion.

In January, Land Bank board approved the proposed acquisition of a majority stake in the PDSHC, the holding firm of the country’s fixed-income trading platform.