Philippines Clean Energy Holding Inc., controlled by Valorous Asia Holdings Pte. Ltd. of Singapore, offered to acquire up to 5.7 percent of First Gen Corp.’s outstanding common shares at P33 per share, or for a total of P6.765 billion.
First Gen said in a disclosure to the stock exchange Tuesday it received from PCEHI a tender offer report to acquire by way of secondary sale from existing shareholders a minimum of 107,897,265 issued and outstanding common shares representing 3 percent.
It also received an offer to buy up to 205,000,000 issued and outstanding common shares representing a maximum of 5.7 percent of the total issued and outstanding common shares of the corporation at P33.00 per common share.
“The bidder is acquiring the tender offer shares for investment purposes. The bidder intends to continuously review its investment,” the tender offer read.
Valorous, a Singapore entity, owns 12.59 percent of First Gen. It is led by KKR Asia Pacific Infrastructure Holdings Pte. Ltd.
Valorous is advised by Kohlberg Kravis Roberts & Co. L.P., which is in turn a subsidiary of KKR & Co. Inc., a global investment firm that offers alternative asset management and capital markets and insurance solutions whose shares are listed on the New York Stock Exchange.
KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR invested over $1 billion in the Philippines since 2018.
First Philippine Holdings Corp. of the Lopez Group owns majority of First Gen at 67.8 percent, while company officers and directors own 0.86 percent. Public ownership is at 18.74 percent, based on the company’s public ownership report as of June 30.
The tender offer will start at 9 a.m. on Sept. 1, 2021 and end at 12 p.m. on Sept. 29, 2021. It provides shareholders of First Gen the opportunity to sell their common shares and realize their investment, in cash, at a premium to the current trading price of the common shares.
The tender offer price represents a 16.61 percent premium over the last closing share price on Aug. 26 of P28.30, a 17.08-percent premium over the one-month volume weighted average price of the company’s common shares and 15.69 percent premium over the 12-month VWAP.
VWAP is calculated by dividing the total value of shares traded in that particular period, by the total number of shares traded during that period.
The bidder said that in the event that the tender offer is successfully completed, it may acquire common shares in an amount sufficient to allow KKR, together with 12.59 percent previously purchased through a voluntary tender offer by its affiliate Valorous in 2020, to nominate and elect a director to the board of First Gen.
PCEHI may seek to nominate a candidate for the next annual shareholder’s meeting of the company in 2022.
PCEHI expects to own and hold a maximum of 657,917,691 common shares, representing about 18.29 percent of the company’s issued and outstanding common shares when the tender offer is successfully closed and completed.
First Gen also asked the PSE to extend the trading suspension and lift it by Sept. 1 in the wake of the tender offer submission.
Meanwhile, First Gen was advised by subsidiary Prime Meridian PowerGen Corp. that the compressor of one of two gas turbines that comprise the 97-megawatt Avion power plant owned by PMPC was damaged.
The Avion power plant features two units that utilize General Electric LM6000 PC dual fuel aero-derivative gas turbines/generators.