Gov’t to scale up PDEX buy bid

According to the LandBank executive, the signing of the share purchase agreement with PDEX shareholders was seen happening within the week

The government is willing to recast its offer to buy the Philippine Dealing and Exchange Corp. (PDEX) at a price higher than P360 a share, according to the Land Bank of the Philippines.

LandBank president and CEO Alex Buenaventura disclosed to finance reporters a revised offer was made mandatory by the declaration of dividends worth some P600 million by the Philippine Stock Exchange (PSE) that currently has majority control of the target bond exchange platform.

“We cannot stick to the P360 per share offer original offer,” the executive said.

The state-owned lender previously secured 43 percent of PDEX via commitments to sell from undisclosed shareholders but needs to acquire more to ensure it has the majority of 66.67 percent of the bond exchange platform.

The government would need to spend more or less P1.5 billion to achieve effective control of the PDEX.

Buenaventura said the lender has to pay premium and has to upsize its offer due to the intervening event represented by the declaration of dividends at the target entity.

He also said LandBank is now conducting a due diligence audit on PDEX to ensure they can put forward a recalibrated offer for those shareholders who have yet to decide on whether or not to cede their shareholdings to the government.

“Our response to their acceptance letter will be a response on what will be the purchase price considering they have declared dividends,” Buenaventura said.

According to the LandBank executive, the signing of the share purchase agreement with PDEX shareholders was seen happening within the week.

LandBank chairman and Finance Secretary Carlos G. Dominguez III has encouraged PDEX shareholders, including its parent, the Philippine Stock Exchange, to sell to the government in support of the broader goal of accelerating the development of the domestic capital markets.

It has been calculated the government needs to acquire some 4.167 million shares to attain 66.67 percent of the bond exchange business currently operated by private corporations.

At P360 a share in the old share purchase offer, the government would need to spend more or less P1.5 billion to achieve effective control of the PDEX.

Buenaventura said the government, via LandBank, could easily raise the cash required to complete the transaction.

Dominguez previously said the PSE, by refusing to act quickly on the government offer, has put the deepening and further development of the domestic capital market at risk.

He said 43 percent of the owners of PDEX, which includes the PSE, already committed to sell their shareholdings.