Several member banks of the Bankers Association of the Philippines (BAP) plan to acquire up to a 49-percent stake in the Philippine Dealing and Exchange Corp. (PDEx), the country’s fixed-income trading platform.
The move follows BAP’s recent divestment of its shares in the Philippine Dealing System Holdings Corp. to the Philippine Stock Exchange (PSE).
“So, what we’re doing is we’re selling our PDS shares, which is the holding company, and then the banks are buying back shares of PDEx,” BAP president Jose Teodoro Limcaoco said in an interview.
The deal, however, is still subject to the Securities and Exchange Commission (SEC) approval as it will require exemptive relief from the 20-percent cap on the ownership of a single industry in an exchange.
“I think the depository really belongs with PSE, but PDEx, which is the bond exchange, the banks wanted to be also part of that to make sure that we continue to grow it. We are hoping to buy up to 49 percent of PDEx,” said Limcaoco, who is also the president and chief executive of Bank of the Philippine Islands.
“This setup makes sense because banks are among the biggest users of the bond exchange,” he said.
Some BAP-member banks, particularly government banks, may not be able to participate in the buyback of PDEx shares as they need to go through a process.
The PSE has been acquiring shares from PDS as part of its broader strategy to integrate the country’s equities and fixed-income markets.
So far, the PSE has signed share purchase agreements with major PDS shareholders including Singapore Exchange Ltd., Whistler Technologies Inc., San Miguel Corp., Golden Astra Capital Inc., Financial Executives Institute of the Philippines Research and Development Foundation, Investment House Association of the Philippines and AIA Philippines Life and General Insurance Co. Inc.
The PSE offered to acquire PDS shares at P600 per share, a deal that could reached P2.32 billion.
The PSE’s acquisition of a controlling stake in PDS is also subject to the SEC approval.
Prior to the deal, the PSE owned 20.98 percent of the issued and outstanding capital stock of the PDS Group.
