First Holdings thumbs down KKR offer

MANILA, Philippines — First Philippine Holdings Corp. (FPH) of the Lopez Group has rejected Kohlberg Kravis Roberts & Co. L.P. (KKR)’s proposal to buy a portion of its stake in First Gen Corp., saying that the offer does not represent the listed power firm’s true value.

In a stock exchange filing, FPH said it has advised KKR of its decision not to pursue KKR’s non-binding proposal to acquire a portion of its shareholding in First Gen Corp. and launch a voluntary tender offer for the power firm’s public float at P35 per share.

“After careful deliberation and consideration, FPH has determined that KKR’s proposal does not represent First Gen’s true value,” the company said.

FPH earlier said it is evaluating KKR’s offer to purchase 8.43 percent of its common shares in First Gen.

KKR then intends to launch a voluntary tender offer for the entire public float of 11.67 percent of First Gen’s outstanding common shares.

The tender offer will support a petition for First Gen’s voluntary delisting to be filed with the Philippine Stock Exchange (PSE).

First Gen, one of the Philippines’ largest independent power producers, is a subsidiary of FPH, which listed in the PSE in 2006.

KKR owns and holds common stocks of First Gen representing an approximate 19.9-percent economic interest.

China Bank Capital Corp. managing director Juan Paolo Colet said that by turning down the offer, First Gen keeps the door open for a potentially more attractive proposal, either from KKR or a competing bidder.