The Philippine Stock Exchange said Tuesday it signed a deal to acquire Investment Houses Association of the Philippines’ stake in PDS Holdings Corp.
Under the share purchase agreement, PSE will purchase IHAP’s 0.5831-percent interest in PDS Holdings worth P11.66 million. The deal will boost PSE’s stake in the operator of the country’s fixed income exchange to 53.36 percent.
The acquisition is a part of the planned unification of equities and fixed income exchanges.
“From a corporate standpoint, maintaining the business operations of both the PSE and PDS while reducing operational costs through synergies can result in greater business scalability and profitability,” PSE said.
“As the two companies have highly similar and integrated functions, there should be synergies that could be realized particularly from an infrastructure standpoint, particularly on the technology side,” it said.
This is the third share purchase agreement signed by PSE pertaining to the acquisition of additional shares in PDS Holdings.
PSE signed an agreement in June to acquire Bankers Association of the Philippines’ 23.8-percent stake in PDS Holdings for P476.4 million.
It also purchased additional 500,000 shares in PDS Holdings held by Whistler Technologies for P160 million in July.
Other major shareholders of PDS Holdings are Singapore Stock Exchange., Tata Consultancy Services Asia-Pacific Phils. Inc., San Miguel Corp., Financial Executives Institute of the Philippines Research and Development Foundation, Development Bank of the Philippines, Social Security System and Citibank N.A.
PSE president Ramon Monzon earlier said he was expecting to close the PDS Holdings acquisition and obtain regulators’ approval within the year.
PSE needs to secure an exemptive relief from the Securities and Exchange Commission to pursue the deal. The current rules prohibit any single industry from owning more than a 20-percent stake in any exchange.
PSE would also require the approval of the Philippine Competition Commission which is tasked to review all mergers worth over P1 billion to ensure fair competition in the market.