The Philippine Stock Exchange said it expects to finalize the terms and conditions for the acquisition of Philippine Dealing Systems within the next couple of weeks.
PSE president and chief executive Hans Sicat said the bourse was regularly providing regulators an update on the deal and that only one or two technical items were still being discussed prior to a final agreement.
Sicat also expressed confidence the PSE would finally secure the approval of the Securities and Exchange Commission and the Philippine Competition Commission about the transaction.
PSE revived its plan in August last year to merge the country’s equities and bond exchanges after a similar proposal was rejected by the SEC in March 2016.
PSE earlier proposed to acquire a majority stake in PDS based on an enterprise value of P2.25 billion.
The acquisition, however, required the exchange to seek an exemptive relief from the SEC. The Securities Regulation Code states that no single industry or business group should own more than 20 percent of an exchange.
After a careful review, the SEC rejected the petition of PSE, citing the exchange’s “failure to present clear and convincing evidence” that it was entitled to an exemptive relief and that its acquisition of PDS would not negatively impact on the PDS’ ability to effectively operate in the public interest.
The purchase of PDS, operator of the nation’s bond exchange, will be mostly funded with debt.
The merger is expected to help the Philippines meet requirements for a cross-border trading platform linking Southeast Asian stock markets.
Among the PDS Holdings’ shareholders are Bankers Association of the Philippines, San Miguel Corp., Golden Astra, Singapore Stock Exchange, 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.
Meanwhile, Sicat said PSE was looking at eight initial public offerings this year.
Sicat said five to six IPO applications were now being processed and two to three deals could be approved in March.