The Lopez group has confirmed that global private equity firm Kohlberg Kravis Roberts & Co. (KKR) has submitted a proposal to expand its holding in First Gen Corporation and privatize the Philippine power producer.
Under the preliminary terms, KKR intends to purchase an additional 8.43 percent stake in First Gen directly from its parent firm, First Philippine Holdings Corporation (FPH), led by tycoon Federico “Piki” Lopez.
Following that purchase, the investment firm plans to launch a voluntary tender offer for First Gen’s remaining 11.67 percent public float, paving the way for a petition to voluntarily delist the company from the Philippine Stock Exchange (PSE).
FPH confirmed that it has received the proposal and is actively reviewing the offer, particularly considering recent developments.
However, both FPH and First Gen emphasized that the proposal remains non-binding and preliminary. The companies clarified that no definitive contracts have been executed, formal talks have not begun, and neither entity has engaged consultants or financial advisors regarding the transaction.
“In the proposal, KKR has offered to purchase 8.43% of FPH’s common shares in First Gen and enter into a shareholders’ agreement with FPH, following which KKR will launch a voluntary tender offer for the entire public float of 11.67% of First Gen’s outstanding common shares,” FPH and First Gen said.
While official regulatory filings did not detail the transaction price, market reports indicate KKR offered ₱35 per share for the 8.43 percent block. Such a price would yield approximately ₱10.6 billion in cash for FPH. KKR is expected to match that ₱35 per share rate for the public tender offer.
The reported ₱35 offer represents a 117 percent premium over First Gen’s ₱16.12 share price on July 9, placing the company’s implied equity valuation at around ₱126 billion. Driven by privatization sentiment, First Gen shares had climbed to ₱22.75 as of August 12.
Should all public investors tender their holdings, KKR’s economic stake in First Gen would expand from roughly 19.9 percent to 40 percent. Meanwhile, FPH’s shareholding would decrease from 56.8 percent to approximately 48.4 percent.
Despite FPH’s direct ownership falling below the 50 percent mark, reports indicate FPH will retain operational control over First Gen, with KKR functioning as an expanded minority partner.