September 25, 2017, 1:28 am
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PSE seeks more time on PDS acquisition

The Philippine Stock Exchange (PSE) is asking the Philippine Competition Commission (PCC) for more time in submitting documents on its  planned acquisition of PDS Holdings Corp. 

Johannes Benjamin Bernabe, PCC commissioner, said the sole equities trading platform in the Philippines has opted to withdraw and refile its documents for review by the competition body.

Bernabe said PSE  informed PCC it needed more time to submit information required by the commission as part of the latter’s review of the acquisition that will pave the way for the merger of the equities and fixed income exchanges.

Bernabe said normally, parties to an acquisition or merger must notify the PCC and pay a P250,000 fee for the review of the transaction. The merger or acquisition may only proceed 30 days after notification.

However, if the PCC requires the submission of additional information, the second phase of the review is triggered and the parties must submit the requested information within 60 days and pay a fee amounting to 1 percent  of the value of the transaction but at least P1 million and no more than P5 billion.

After paying the fee for the Phase I review, the PSE was asked by the PCC to provide more information regarding its operation of the equities and fixed income bourses after the acquisition, Bernabe said.

The PCC also wanted more information on the efficiencies that will be achieved with the merger of the two exchanges and how this will benefit investors and other stakeholders.

Since this will trigger the second phase of review which has a 60-day deadline, Bernabe said the PSE opted to refile its notification since it felt it will need more than 60 days to provide the information sought by the PCC.

While the PCC is open to granting 15-day extension if requested by the PSE, Bernabe said the PSE deemed it better for the PSE to  refile its notice of acquisition and merger.

Earlier this year, the PSE signed share purchase agreements with PDS shareholders including the Bankers’ Association of the Philippines to acquire a total of 31.8 percent incremental equity interest in PDS Holdings Corporation.

In addition to its existing 20.98 percent interest, the PSE now has a total of 52.78 percent majority ownership interest in PDSHC.

However, the purchase shall be subject to the approval of government agencies, particularly the SEC and Bangko Sentral ng Pilipinas (BSP), as may be required by law, and to the compliance with the provisions in the articles of incorporation of PDS.

The PSE must secure a grant by SEC of an exemptive relief to acquire additional shares in PDSHC resulting in ownership of more than 20 percent of an exchange.

“This transaction is envisioned to facilitate further growth in the local capital markets by introducing efficiencies in the trading and back office systems of both the equities and fixed income markets, among others,” the PSE then said.
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