Philippines: Landbank board okays 66.67% acquisition of PDS Holdings

Landbank PDS Holdings

The Board of Directors of state-owned lender Land Bank of the Philippines (Landbank) has approved the planned acquisition of 66.67 per cent of fixed-income bourse Philippine Dealing System Holdings Corp (PDS Holdings).

Landbank President and CEO Alex Buenaventura told reporters that the bank’s board had approved during its meeting on February 27 the plan to acquire the stake at P360 ($6.9) per share.

The bank’s board approved in principle last January the plan to acquire a majority stake in PDS Holdings. With the approval, Buenaventura said it will proceed to finalise the due diligence for the transaction.

It was Buenaventura who proposed that Landbank, which owns 1.56 per cent of PDS Holdings, raise its stake by acquiring up to 66.67 per cent of the fixed-income bourse.

In his letter to the board, Buenaventura said purchasing PDS shares could be a profitable investment for the lender. The acquisition will increase Landbank’s profits and accelerate development of capital markets in the country, he said.

PDS Holdings’ parent firm PDS Group is a capital market infrastructure that also owns and operates the Philippine Dealing & Exchange Corp (PDEx), Philippine Depository & Trust Corp (PDTC), Philippine Securities Settlement Corp (PSSC), and PDS Academy for Market Development Corp (PDSA).

Landbank’s plan to acquire 66.67 per cent of PDS Holdings is a challenge to the Philippine Stock Exchange (PSE)’s plan to merge with PDS Holdings.

The PSE, however, expressed confidence that it will be able to fully comply with Securities Regulation Code requirement to reduce the ownership of broker shareholders to 20 per cent, one of the key requirements before the PSE can secure the nod for a merger with PDS Holdings.

In June last year, the PSE entered into an agreement to acquire the 23.47 per cent stake of Bankers Association of the Philippines in PDS Holdings, worth P437.8 million ($8.4 million).

It then proceeded to acquire the stakes of Whistler Technologies Services Inc (WTSI), Investment Houses Association of the Philippines (IHAP), the Philippine American Life and General Insurance Co., the Financial Executives Institute of the Philippines Research and Development Foundation, San Miguel Corporation, and TCS.

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