Renewables giant First Gen plummets in Manila following rejection of KKR’s bid

(Il Sole 24 Ore Radiocor) - First Gen, one of the Philippines’ leading renewable energy companies, has plummeted on the Manila Stock Exchange following its holding company’s decision to reject KKR’s takeover bid – aimed at a subsequent delisting – for a further block of the company’s shares. During the trading session, the share price fell by a record 19 per cent, whilst First Philippine Holdings Corp – which holds 67.84 per cent of First Gen’s share capital – recorded losses of 10 per cent.

Rewinding a little, the holding company rejected KKR’s non-binding offer this morning to acquire an 8.43 per cent stake in the renewable energy giant at a price of 35 pesos (US$0.57) per share. According to market participants, this move would likely have triggered a mandatory takeover bid by the global investment firm to acquire First Gen’s free float, with the total value of the transaction amounting to approximately 165.44 billion pesos (US$2.69 billion). The aim of the takeover bid was to delist First Gen from the Philippine Stock Exchange. However, according to the management of First Philippine Holdings Corp, ‘the proposal does not reflect the true value of First Gen’, which had a market capitalisation of 110.63 billion pesos at Friday’s close. KKR had already considered acquiring part of the First Gen shares held by First Philippine Holdings before launching a voluntary takeover bid for the entire free float of the renewable energy giant – amounting to 11.67 per cent – and requesting its delisting from the Manila Stock Exchange.

Analysts believe that the holding company’s rejection will not prompt the investment fund to throw in the towel. “We expect the shares of First Gen and First Philippine Holdings to remain at high levels in the near future,” explain the experts at DragonFi Securities, “as the rejection could prompt KKR to raise its bid should it remain interested.”