PSE buys IHAP’s stake in PDS Holdings

MANILA, Philippines – The Philippine Stock Exchange (PSE) on Tuesday, August 29 said it has signed a deal to acquire the stake of the Investment Houses Association of the Philippines (IHAP) in PDS Holdings Corporation for P11.66 million.

Under the share purchase agreement, the PSE will buy IHAP’s 0.5831% interest in PDS Holdings. This will boost PSE’s stake in the operator of the country’s fixed income exchange to 53.36%.

The acquisition is part of the planned unification of equities and fixed income exchange. (READ: PSE plans to offer more shares to bring PDS merger closer)

“From a corporate standpoint, maintaininghe business operations of both the PSE and PDS while reducing operational costs through synergies can result in greater business scalability and profitability,” the PSE said in a statement.

“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 added.

This is the 3rd share purchase agreement signed by the PSE pertaining to acquisition of additional shares in PDS Holdings.

In June, the PSE entered into an agreement to acquire the 23.8% stake of the Bankers Association of the Philippines in PDS Holdings for P476.4 million.

In July, it bought an additional 500,000 shares in PDS Holdings held by Whistler Technologies for P160 million.

Finalize within 2017

Other major shareholders of PDS Holdings include the Singapore Stock Exchange, Tata Consultancy Services Asia-Pacific Phils Incorporated, San Miguel Corporation, Financial Executives Institute of the Philippines Research and Development Foundation, Development Bank of the Philippines, Social Security System, and Citibank NA.

PSE president Ramon Monzon earlier said he expects to close the PDS Holdings acquisition and to obtain regulators’ approval on the deal within this year.

To finalize the deal, the PSE would need to secure an exemptive relief from the Securities and Exchange Commission. This exemptive relief will allow the PSE to acquire majority interest in PDS Holdings as the current rules prohibit any single industry from owning more than 20% stake in any exchange.

At the same time, the PSE would need to get the Philippine Competition Commission’s approval. The PCC is tasked to review all mergers over P1 billion to ensure fair competition in the market. – Rappler.com