First Philippine Holdings Rejects KKR's First Gen Buyout Bid
First Philippine Holdings Corp. (FPH) declined Kohlberg Kravis Roberts & Co. L.P.'s (KKR) P35 per share offer for a stake in its power generation unit, First Gen Corp. FPH stated the bid undervalued the energy producer.
Offer Deemed Too Low
First Philippine Holdings Corp. (FPH) rejected a buyout offer from Kohlberg Kravis Roberts & Co. L.P. (KKR) for its subsidiary, First Gen Corp. FPH, a Lopez Group company, formally informed KKR of its decision not to proceed. The company determined KKR's P35 per share proposal did not reflect First Gen's true value.
FPH stated the offer significantly undervalued the energy producer. First Gen is one of the Philippines' largest independent power producers. It has been listed on the Philippine Stock Exchange (PSE) since 2006, operating crucial energy assets.
KKR's Original Proposal
KKR's non-binding proposal sought to acquire 8.43 percent of FPH's common shares in First Gen. Following this, KKR planned a voluntary tender offer (VTO) for First Gen's public float. This public float represents 11.67 percent of First Gen's outstanding common shares. The VTO would also be priced at P35 per share.
KKR's ultimate goal was to support First Gen's voluntary delisting from the PSE. KKR already holds an approximate 19.9 percent economic interest in First Gen.
FPH's rejection keeps open the possibility of a more attractive valuation for First Gen. China Bank Capital Corp. managing director Juan Paolo Colet noted this decision. He suggested it might encourage KKR to submit a revised offer. Alternatively, it could invite competing bids from other interested parties.
This creates potential for a higher share price for First Gen investors. The market will now watch for any new proposals affecting the Philippine power sector.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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