The group of lenders led by the Bankers Association of the Philippines (BAP) is selling a smaller stake in Philippine Dealing System Holdings Corporation (PDSHC) to the Philippine Stock Exchange than the amount earlier targeted.
In a disclosure, the PSE said that it has entered into a Share Purchase Agreement with BAP, for itself and on behalf of BAP Data Exchange, Inc. and certain member-bank.
Under the SPA, the PSE agreed to purchase and BAP agreed to sell 1.16 million common shares of stock of PDSHC, equivalent to 18.62 percent of the total issued and outstanding stock of PDSHC.
Last December 26, the PSE said it signed a Term Sheet with the group for the purchase and of up to 1.8 million common shares of stock of PDSHC, equivalent to 28.8335 percent of the total issued and outstanding stock of PDSHC.
A term sheet is a non-binding document that provides a high-level overview of the key terms of a potential deal such as valuation, investment size, and ownership percentage but the parties can still negotiate and change the terms while an SPA is complete with all aspects of the transaction and enforceable once signed.
With the SPA signed with BAP, the PSE will be acquiring a total of 57.25 percent or 3.58 million shares of PDHSC for P2.15 billion based on the PDHSC enterprise value of P3.75 billion.
Last January 17, AIA Philippines Life and General Insurance Company Inc. also agreed to sell its four percent stake in PDHSC, equivalent to 250,000 shares worth P150 million to the bourse.
AIA’s move comes after the decision of the Financial Executives Institute of the Philippines Research and Development Foundation (FINEX Foundation) to also sell its stake to the PSE.
PSE entered into a share purchase agreement with FINEX Foundation on Dec. 27, 2024 for the acquisition of 96,388 common shares of PDSHC equivalent to a 1.54 percent interest.
The PSE signed agreements with PDS shareholders last Dec. 26, 2024 to purchase a total of 3.87 million PDSHC shares for P2.32 billion. The transaction cost was based on the P3.75 billion enterprise value of PDSHC or P600 per share.
Among the agreements signed was the term sheet with the BAP as well as Mizuho Bank Ltd. for its 0.08 percent stake.
The PSE also inked share purchase agreements with five other PDS shareholders. PSE will acquire Singapore Exchange Limited’s 20 percent stake; Whistler Technologies, Inc.’s eight percent; San Miguel Corporation’s four percent; Investment House Association of the Philippines’ 0.65 percent; and Golden Astra Capital, Inc.’s 0.36 percent shareholding in 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," said PSE President and CEO Ramon S. Monzon.
He added that, “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.”
The PDS is the holding company that owns the Philippine Dealing & Exchange Corporation, 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.
The PSE also disclosed that it has closed the transactions with FINEX Foundation and IHAP.