MANILA, Philippines - The merger of the country’s stock and bonds exchanges has gained more traction after the Bankers Association of the Philippines (BAP) agreed to sell its shares to the Philippine Stock Exchange (PSE).
The PSE said yesterday it has reached an agreement with BAP on the indicative terms and conditions for the proposed buyout of BAP’s stake Philippine Dealing System Holdings Corp. (PDS), the holding firm for corporate bond bourse Philippine Dealing Exchange Corp. (PDEx).
PSE, the operator of country’s only stock market, is looking to purchase BAP’s 28.9 percent share in PDS for an estimated amount of P650 million based on PDS’ total value of P2.25 billion.
PSE said the purchase price, however, is still subject to terms and conditions to be finalized after the completion of a due diligence it will conduct on PDS.
“The parties target the completion of the transaction on or before Dec. 29, 2014 at which time the parties shall execute definitive agreements,” the PSE said.
The PSE and the PDEx have been eyeing a merger, which is seen to enhance liquidity in the financial markets, since last year.
“If it happens it will be great because we will consolidate one product in one exchange. Number two, as an operation, it will be more, you will get the synergies out of operating one exchange. Thirdly, it sends the right signal that as market operators we are going to increasing scale. And it will simplify a few points on governance,” PSE president and chief executive officer Hans Sicat said in an earlier interview.
PSE owns a 20 percent stake in PDS. It targets to secure at least 67 percent ownership in PDS to make the PSE and PDEx merger possible.