The Bankers Association of the Philippines (BAP) is waiting for the Philippine Stock Exchange to name a price if it wants to buy the stake of banks in the Philippine Dealing System Corporation (PDS), which owns the fixed income bourse Philippine Dealing & Exchange Corporation.
In an interview, BAP President Jose Teodoro Limcaoco, also president and CEO of Bank of the Philippine Islands, said “They have said they want to buy but there is no price. We have also engaged an adviser (to determine) what the value might be.”
The PSE has already sent the banks a letter indicating its interest to buy them out from the PDS but did not indicate a price, he said noting that the banks are willing to sell “at the right conditions.”
Limcaoco said that, among these conditions, “We have to understand the governance of PDEx (once it is controlled by the PSE). PDEx is the bond exchange and its biggest customers are the banks. We want to understand how that would operate.”
“We’re a shareholder of PDS, which in effect has shareholdings in PDEx. So we understand how PDEx is governed. If we we’re to sell PDS, we wouldn’t understand how PDEx is governed. So we’re trying to understand how they are supposed to govern PDEx,” he explained.
PSE President Ramon S. Monzon had earlier said the bourse is is preparing to renegotiate its planned buyout of its fellow shareholders in the PDS Group after securing the approval of the Securities and Exchange Commission late last year.
He said they are just waiting for the Bankers’ Association of the Philippines to get the authority from the 25 bank-shareholders to represent them in the negotiations.
“There are many shareholders of PDS. But most of them are banks. But I am not talking to all 25 because they have assigned a power of attorney to BAP. I am only talking to BAP for all the banks. And then there are a few more shareholders: SGX, Whistler Technology, Tata Consulting, San Miguel Corporation, FINEX, SSS,” he said.
However, Monzon said “We have not started the negotiations now because the power of attorney issued by the banks to the BAP have expired. So the BAP now is renewing that with the banks. Until that happens, I don’t want to talk to 25 different sectors. So we’re waiting for that.”
He said the PSE hopes to close the transaction this year and has already allocated some funds for it although the bourse may also have to take out a loan “depending on what the final price is.”
Monzon noted that, in the PSE’s previous negotiation with the PDS shareholders, they have already signed the deal but they were not able to get the regulatory approval.
“So this year, we reversed the process and got the regulatory approval first before starting negotiations with the shareholders because I don’t want to waste their time again or our time,” he explained.
Last December, the SEC finally exempted the PSE from the 20 percent cap of ownership so it can acquire full ownership of the PDS Group.