Global investment group Kohlberg Kravis Roberts & Co. (KKR) is eyeing to raise its stake in First Gen led by bilyonaryo Federico “Piki” Rufino Lopez to gain a seat on FGEN’s nine-member board.
Philippines Clean Energy Holding Inc (PCEH), a unit of KKR Asia Pacific Infrastructure Investors’ subsidiary Valorous Asia Holdings, has offered to buy through a tender offer between 107.897 million and 205 million shares from existing shareholders at P33 per share (or total cost of P3.56 billion to P6.765 billion).
KKR is offering shareholders a 6.61 premium over FGEN’s last closing share price of P28.30 on August 26 and a 17.08 percent premium over the one-month volume-weighted average price (VWAP) and 15.69 percent premium over the 12-month VWAP.
The tender offer will be from September 1 to 29.
PCEH can opt to extend the tender offer period subject to approval by the Securities and Exchange Commission.
PCEH said it was buying more FGEN shares for “investment purposes” but it was open to “an extraordinary corporate transaction” such as a merger, reorganization, or liquidation; and voluntary delisting.
KKR’s tender could reduce FGEN’s free float to as low as 13 percent from 18.74 percent. This could push it out of the PSE Index which requires 15 percent minimum free float.
This is the second tender offer of KKR since June 2020 when it acquired 427.04 million shares at P22.50 per share or a total of P9.6 billion.
KKR’s Valorous already has a 12.59 percent stake in FGEN and is seeking to increase this to as much as 18.3 percent which would entitle the company to one board seat in the firm’s annual stockholders meeting in 2022.
KKR currently has a board adviser on FGEN’s board, KKR Asia Pacific Infrastructure head David Simon Luboff.
Aside from chairman and CEO Lopez, other members of FGEN board are president and COO Francis Giles B. Puno, EVP Richard B. Tantoco, former Trade Secretary Peter Garrucho, Manuel “Beaver” Lopez Jr.,
Elvira Lopez Bautista, former Socio-Economic Planning Secretary Cielito Habito, Alicia Rita Morales and Edgar O. Chua.
PCEH’s top management are Luboff, KKR managing director Manolo Michael de Guzman (formerly from Macquarie and Credit Suisse), KKR director Cecilio Francisco Velasco Azonos, Christine Paua Base, and Monina Jane Sioson Nazal. Luboff is currently a board adviser of FGEN.