Landbank offers P450 M to buy out SGX in PDSHC

MANILA, Philippines — State-run Land Bank of the Philippines has offered to purchase the entire stake of the Singapore Exchange Ltd. (SGX) in the Philippine Dealing System Holdings Corp. for P450 million or P360 per share.

In a document acquired by reporters, Landbank president and chief executive officer Alex Buenaventura indicated the bank’s willingness to purchase the 1.25 million shares of SGX, which corresponds to 20 percent of PDSHC.

“The offerer (Landbank) offers to purchase from the seller (Singapore Exchange) all of the latter’s shares of capital stock in PDSHC. The offerer offers to purchase the subject shares at a purchase price of P360 per share,” Buenaventura said in the letter dated March 13.

The letter was addressed to Ramon Monzon, president and chief executive officer of the Philippine Stock Exchange (PSE), another major shareholder of PDSHC.

Buenaventura said its offer to the Singaporean bourse is valid for 30 days from receipt of the letter.

“If the seller accepts this offer, the parties shall negotiate and enter into the pertinent share purchase agreement covering the subject shares. The share purchase agreement shall incorporate the terms and conditions of this offer, and shall contain all agreements, covenants, representations, warranties and indemnifications to be negotiated by the parties,” the Landbank chief said.

In case it also agrees with the offer, Landbank said SGX should give the bank and its authorized representatives opportunities to inspect books and documents, as well as assets, liabilities, contracts and operations, whichever may be necessary for the due diligence in relation to the transaction.

Landbank’s offer to SGX is part of the series of acquisitions to be undertaken by the bank, with the end goal of purchasing at least 66.67 percent or majority control of PDSHC.

SGX is currently one of the biggest stakeholders in the fixed income bourse, and is one of the few shareholders that do not have a share purchase agreement with the PSE, which is also aggressively pushing for a merger with the PDSHC.

Landbank currently owns 1.56 percent of PDSHC through the Bankers Association of the Philippines.

Earlier, Buenaventura told reporters the government financial institution intends to speed up the acquisition process of PDSHC and lock up all deals within 30 days.

He said Landbank would also submit counter-offers to shareholders who already have share purchase agreements with the PSE while said agreements are not yet in effect.

Buenaventura said Landbank is targeting to purchase at least 4.167 million of PDSHC’s common shares with a total purchase price of P1.5 billion, which will be sourced from the bank’s existing capital.

The bank has also filed with the Securities and Exchange Commission an application for regulatory relief from the 20 percent ownership limit of exchanges and exchange controllers.