Landbank finalizing PDS buyout

MANILA, Philippines — Government-owned Land Bank of the Philippines hopes to complete the buyout of the Philippine Dealing System Holdings Corp. (PDSHC) by the end of the year.

“We are in talks with the regulators right now and those who expressed interest to sell to us,”said Carel Halog, executive vice president of the  Landbank Treasury and Investment Banking Sector.

“We feel that this will be good for the government. Aside from providing us with a good revenue stream and another diversified source of revenue, we expect to be able to help in further developing the capital markets,” he said.

Last year, Landbank lowered its offer price for PDSHC to P215 a share from the previous price of P360 after the fixed-income bourse declared dividends.

The new purchase price was based on a net asset value of P980.61 million, with any excess accrued as dividends to existing shareholders.

Currently, PDSHC has a total outstanding shares of 6.25 million, with the Philippine Sock Exchange owning 20.98 percent, the Singapore Exchange Ltd. (20 percent), Bankers Association of the Philippines for itself and as trustee of its member-banks (13.26 percent), BAP – other member-banks (9.78 percent), and Tata Consultancy Services Asia-Pacific Pte. Ltd. (eight percent).

Landbank owns 1.56 percent of PDSHC through BAP. If it successfully acquires at least 66.67 percent of the fixed income bourse, Landbank’s stake would increase to 68.23 percent.

The acquisition of a majority control of PDSHC will help strengthen the bank’s  financial position and contribute to the development of the domestic capital market.

This will allow the small and medium enterprises as well as other sectors to raise capital through equities.