The Philippine Stock Exchange completed its P2.89-billion stock rights offering, effectively reducing the ownership of stockbrokers in the local bourse to below 20 percent.
The rights offering was strongly supported by retail and institutional investors, according to BDO Capital and Investments Corp., one of the underwriters handling the deal.
The PSE sold 11.5 million shares at P252 apiece during the offering period that ended March 16.
Broker-shareholders were not allowed to participate and subscribe to the shares. The rights offering aims to comply with the Securities Regulation Code provision that no single industry can own more than 20 percent of the voting rights of a stock exchange.
With the completion of the rights offering and the reduction of brokers’ ownership in the stock exchange, the PSE is confident it could finally secure a green light from the Securities and Exchange Commission to acquire a majority interest in Philippine Dealing System and Holdings Corp., the owner and operator of the country’s fixed income exchange
The PSE has been negotiating to take over the fixed-income exchange for the past years now in line with its plan for the two capital markets to promote synergies in operations.
The PSE to date signed share purchase agreements with several shareholders of PDSHC that will enable it to increase the bourse’s stake to 69.03 percent.
The completion of the share purchase agreements is subject to certain closing conditions, including the granting of a so-called exemptive relief to PSE from the SEC to own more than 20 percent of an exchange.
The Philippine Competition Commission in November approved PSE’s planned acquisition of PDSHC.
Land Bank of the Philippines, however, recently announced that it offered to acquire a 66.78-percent stake of PDSHC at a much higher price of P360 per share compared with the bid of P320 apiece from the PSE.
LandBank gave PDSHC shareholders until April 5 to accept the offer.
LandBank, the third-largest lender in terms of assets, plans spend P1.5 billion to acquire a 66.67-percent stake in PSHC.
LandBank president and chief executive Alex Buenaventura said early this month the bank expected to “lock up” the deal in 30 days, which would involve the acquisition of two thirds of 6,250,000 shares in PDS.
“If we buy 66.67 percent, that will be equivalent to 4,167,000 shares. If we buy at P360 per share, that will be a total buying amount of P1.5 billion. So that is the total amount,” Buenaventura said.
“Our offer of P360 per share is 12.5-percent higher than the PSE offer of only P320 per share. The acquisition by LandBank of PDS will not only serve as a potentially profitable investment of LandBank but also more importantly aligned with the government’s capital markets development program,” Buenaventura said.
Other major shareholders of PDS that have yet to sell their shares in the PSE include Singapore Exchange Ltd., Development Bank of the Philippines, Social Security System and Citibank NA.