the Outsider - PSE Points to Ponder

  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...

  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...