The Philippine Stock Exchange is acquiring more shares in Philippine Dealing System Holdings Corp. (PDS) as part of its strategy to consolidate the equities and fixed income exchanges.
The PSE said Thursday it signed a share purchase agreement to acquire Social Security System’s (SSS) and Insular Investment Corp.’s stake in PDS.
SSS owns 96,388 PDS shares, while Insular holds 4,030 shares.
The PDS is the holding company that owns the Philippine Dealing & Exchange Corp., the operator of the fixed income exchange. It also owns the Philippine Depository & Trust Corp. which serves as the depository for equities and fixed income securities.
With the acquisition, PSE will own a total of 79.94 percent of PDS, inclusive of the company’s existing 20.98-percent equity interest.
The PSE also entered into share purchase agreement with other PDS shareholders including Singapore Exchange Limited, Bankers Association of the Philippines, San Miguel Corp., Whistler Technologies Services, Inc., AIA Philippines Life and General Insurance Company Inc., Golden Astra Capital, Inc and FINEX Foundation in December.
The transaction is subject to customary post-closing conditions.
The PSE offered to acquire 3.87 million PDS shares at P600 apiece, or for a total of P2.32 billion. The transaction cost was based on the P3.75-billion enterprise value of PDS.
“These signed agreements bring us a step closer to achieving our objective of consolidating the equities and fixed income exchanges and realizing the synergies and efficiencies from this unified setup. This will also allow us to be instrumental in the growth and development of the Philippine capital market with the introduction of new products for various stakeholders as well as the implementation of risk management processes,” said PSE president and chief executive Ramon Monzon.
The Securities and Exchange Commission granted the PSE exemptive relief in December 2023 to allow it to exceed the mandatory limit of 20-percent ownership and voting rights in an exchange by an individual or an industry, giving it leeway to own up to 100 percent of the PDS Group.