The Chinese consortium has won bid to acquire 40 percent stake of Pakistan Stock Exchange at Rs 28.00 per share against reserve price of Rs 26.00 per share. The deal will generate an additional liquidity of Rs 9 billion ($85.5 million). The Chinese Consortium comprises of three Chinese Exchanges, ie, China Financial Futures Exchange Company Limited (being the lead bidder), Shanghai Stock Exchange, Shenzhen Stock Exchange and two local financial institutions, ie, Pak China Investment Company Limited and Habib Bank Limited.
The Divestment Committee of Pakistan Stock Exchange on Thursday received bids from interested bidders till 4pm. The bids were opened at 5pm in the presence of representatives of all qualified bidders. Another strategic investor, Markhor, a consortium comprising NASDWX, DCE Capital, Kingsway Capital, Blibros Capital, MCB and FABL also submitted bid to acquire all 40 percent PSX stake; however, during the bid opening process it withdrew its bid, paving way for the Chinese consortium to emerge as single bidder for this transaction.
Out of the total 40 percent stake of PSX, allocated for sale to strategic investors, 30 percent shares allotted to Chinese consortium while 5 percent stake will be given to Habib Bank Limited and Pak China Investment Company each. Chairman PSX Divestment Committee Shahzad Chamdia told Business Recorder that a Letter of Acceptance would be issued to the successful bidder soon; following which, a formal sale-purchase agreement would be signed between the relevant parties.
He said that initially two strategic investors submitted their bids, however Markhor withdrew its bid during the process. Later a press release was issued by PSX. According to it, in order to sell 40 percent equity stake held by existing shareholders of Pakistan Stock Exchange Limited (formerly Karachi Stock Exchange Limited) under the Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2012 and Regulations framed thereunder, the Divestment Committee of PSX, under the chairmanship of Shahzad Chamdia, conducted the bidding process on Thursday, December 22, 2016.
The bid submitted by Chinese Consortium at Rs 28 per share emerged as the highest and acceptable under the relevant regulations. The Divestment Committee will now issue the Letter of Acceptance to the successful bidder ie Chinese Consortium, subject to formal approval of Securities and Exchange Commission of Pakistan (SECP).
Pakistan Stock Exchange has been the best performing stock market in Asia and one of top five best performing markets in the world. MSCI has upgraded Pakistan Stock Exchange to its Emerging Market Index from Frontier Market Index. Under the Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2012, 40 percent shares had been given to the 200 members of stock exchange. Now 40 percent stake has been given to the strategic investors and the deadline for completion of this bidding process is December 27, 2016. The remaining 20 percent shares would be offered to the general public through initial public offering (IPO) and this process would be completed in six months after completion of the bidding process.
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