the Outsider - PSE Points to Ponder

The investment firm bought into a Philippine power champion expecting a long-duration infrastructure play. Six years later, foreign-ownership constraints, governance uncertainty, heavy capital requirements and a stubbornly weak stock price have narrowed its exit routes. MANILA— When KKR first bought into First Gen Corp. in 2020, the investment had the hallmarks of a patient infrastructure wager: scarce generating assets, growing electricity demand and a portfolio positioned around natural gas and renewable power. Six years later, the global investment firm’s roughly 19.9% economic interest has become something more complicated—a large minority position that is difficult to expand, difficult to sell and now difficult to take private. KKR’s attempted solution, a ₱35-a-share proposal that would have enlarged its stake and removed First Gen from the Philippine Stock Exchange, was rejected by controlling shareholder First Philippine Holdings Corp., or FPH, as failing to reflect First Gen’s...

  The private-equity firm’s proposal values all of First Gen below the indicated worth of its economic interest in EDC alone—before counting gas, hydro and pumped-storage assets **MANILA—**KKR’s proposal to increase its stake in First Gen Corp. offers shareholders a hefty premium to the power producer’s earlier market price. However, when looked at against a separate takeover proposal for First Gen’s geothermal business, the offer begins to resemble a bargain for the buyer. The global investment firm has proposed paying ₱35 a share for an additional 8.43% interest in First Gen from parent First Philippine Holdings Corp., then launching a voluntary tender offer at the same price for the company’s entire 11.67% public float. If all targeted shares are acquired, KKR’s economic interest could rise from 19.9% to about 40%, supporting a plan to delist First Gen from the Philippine Stock Exchange. At ₱35 a share, First Gen’s roughly 3.597 billion outstanding common shares would be valued...

  The departure of the family branch most closely identified with ABS-CBN removes pressure on Federico “Piki” Lopez to use the group’s power assets to support the struggling broadcaster—and leaves him freer to pursue his clean-energy mission. **MANILA—**For months, the question hanging over the Lopez family’s energy empire was whether its most valuable assets would have to pay for the troubles of its most storied one. That question may now have a different answer. Eugenio “Gabby” Lopez III’s family branch sold its entire 25.68% interest in Lopez Inc., the clan’s privately held ultimate parent, to businessman Ramon Ang in a transaction announced Aug. 10. Ang invested through a personal holding company rather than San Miguel Corp., while the remaining Lopez family branches retained majority control of the group.  The ownership change could do more than quiet one of the Philippines’ most public family disputes. It may remove the pressure on Federico “Piki” Lopez to turn the famil...

  Stronger geothermal earnings lifted first-half profit, but weaker operating cash flow and an initial ₱16.5 billion investment in hydro projects sharply reduced the power producer’s cash cushion **MANILA—**First Gen Corp. entered 2026 with a large cash pile from the sale of a controlling stake in its natural-gas business. Six months later, much of that financial cushion had disappeared. The Philippine power producer ended June with ₱23.74 billion in cash and cash equivalents, down ₱33.77 billion—or nearly 59%—from ₱57.51 billion at the end of 2025. The decline reflected weaker cash generation, debt repayments and the opening payment on an ambitious push into pumped-storage hydropower.  Those demands are casting a cloud over First Gen’s second-half dividend distribution, even as its operating businesses—particularly geothermal subsidiary Energy Development Corp.—reported stronger results. First Gen paid ₱16.5 billion during the first half for a 33% interest in Prime Hydropower...

  Buying First Gen could give Prime Infrastructure a listed vehicle, end a damaging control dispute, and provide the Lopez group with enough capital to repair its empire—including ABS-CBN. Sometimes the price of corporate peace is best expressed per share. For the Lopez family, that figure may be ₱81 . At that price, First Gen Corporation would carry an equity value of approximately ₱291 billion , or about US$4.75 billion . That would represent a formidable premium over FGEN’s recent market price near ₱20, but it would also recognize the hidden value of its interest in Energy Development Corporation, its remaining gas exposure, hydroelectric assets, pumped-storage investments, and an unusually liquid parent balance sheet. FGEN has approximately 3.597 billion common shares outstanding, making the arithmetic straightforward. The most plausible buyer need not be found abroad. Enrique Razon Jr.’s Prime Infrastructure Capital Inc. is already doing business with FGEN on both sides of the...

  How the Lopez family responds to Barito Renewables’ approach for EDC will test whether its corporate pyramid protects control—or respects the capital supplied by everyone else. Corporate pyramids are efficient machines for separating control from ownership. A family can govern a large industrial empire while supplying only a fraction of its underlying equity. Such structures are not inherently objectionable. Outside investors enter them voluntarily, often because a controlling shareholder contributes something valuable: patience, operating expertise, political durability, or a coherent long-term vision. But the bargain carries an obligation. The less capital controllers have at risk, the more carefully they must demonstrate that decisions are being made for all shareholders rather than principally to preserve control. That is why the unsolicited approach by Indonesia’s PT Barito Renewables Energy Tbk, or BREN, for Energy Development Corporation is more than a takeover proposal. I...