First gen entertains share acquisition offer; trading suspended

First Gen Corp. voluntarily halted trading at the Philippine Stock Exchange (PSE) on Friday as a group named Philippines Clean Energy Holding Inc. (PCEHI) sought to acquire 3 percent up to 5.7 percent in the Lopez-led firm.

This was due to a public notice published in the Inquirer, also on Friday, through which PCEHI said it intended to acquire through a public or voluntary tender offer about 108 million up to 205 million issued and outstanding shares in First Gen.

PCEHI said the proposed transaction was “subject to the satisfaction of certain conditions,” and was intended to start on Sept. 1. The group was expected to file within Friday a tender offer report with the PSE, Securities and Exchange Commission and First Gen.

“The request [for voluntary suspension of trading was] made to give the company’s shareholders equal access to the said information,” First Gen said in a disclosure.

A day before trading was suspended, First Gen shares closed at P28.30 apiece. This suggests that the value of PCEHI’s proposed acquisition may be within the range of P3.05 billion to P5.8 billion.

As of this writing, no additional details were available and First Gen had not received a tender offer report from PCEHI.

First Gen’s outstanding shares totalled about 3.6 billion and the ownership limit was at 40 percent.

The latest development follows a series of investments in First Gen and affiliate Energy Development Corp.

Global investment firm KKR group, through Singapore-based subsidiary Valorous Asia Holdings, announced in June 2020 the acquisition of an 11.9-percent stake in First Gen at a total of P9.6 billion, or about $192.2 million.

This was more than the P7.29 billion worth of First Gen common shares that Valorous said it intended to acquire when it first revealed the transaction a month prior.

In October 2017, a group with a similarly sounding name—Philippines Renewable Energy Holdings Corp. (PREHC)—acquired 31.7 percent of EDC’s total outstanding voting shares from existing shareholders through a $1.3-billion tender offer.

PREHC is a consortium of investors comprising funds managed by Macquarie Infrastructure and Real Assets and Arran Investment Pte. Ltd., an affiliate of GIC Pte. Ltd.