BAP expects formal PSE offer for PDS stake buyout this week

MANILA, Philippines — The Bankers Association of the Philippines (BAP) is expecting a formal offer from the Philippine Stock Exchange Inc. (PSE) in buying its stake in the Philippine Dealing System Holdings Corp. (PDS) this week.

At the sidelines of the Bank Marketing Association of the Philippines’ 50th anniversary dinner reception, BAP president Jose Teodoro Limcaoco said they are expecting a formal offer from the PSE this week.

“Then the board will take it up and study. We don’t know how much or anything,” he told reporters.

Asked if there is a target price the BAP is eyeing to accept, Limcaoco said the BAP and the PSE may now have two separate internal valuations.

“I’m sure they’ll be far apart, but I’m sure we can come to an agreement. The price is not an issue or shouldn’t be a stumbling block,” he said.

Earlier in May, Limcaoco said the BAP is keen on selling its stake in the PDS at the right conditions.

The PSE plans to acquire up to 100 percent of the PDS Group, the operator of the Philippine Dealing and Exchange Corp. (PDEx), the country’s sole fixed-income exchange, as part of its goal to integrate the two exchanges.

The PSE currently owns 20.98 percent of the issued and outstanding capital stock of the PDS Group.

Other PDS stockholders include the BAP with more than 28 percent, Singapore Exchange Ltd. with 20 percent, Tata Consultancy Services Asia with eight percent, Whistler Technologies Services Inc. with eight percent and San Miguel Corp. with four percent, among others.

The BAP is the lead organization of universal and commercial banks in the Philippines consisting of 44 member banks, 20 of which are local banks.

Limcaoco said once the two parties come into an agreement and the PSE buys BAP’s stake, the PDS will be owned by the PSE.

“You’ll have the depository owned by the PSE and then PDEx which is another exchange,” he said.

“Whether that remains a separate bond exchange or whether they fold that bond exchange into a bond and stock exchange, we’ll see,” he added.

The PSE earlier said the resulting integration of the country’s equity and fixed-income exchanges would allow for the delivery of more efficient and more types of products, services and better risk management systems for financial services.