First Philippine Holdings turns down KKR's bid for First Gen stake

First Philippine Holdings Corp has formally declined a proposal from global investment firm KKR to acquire an 8.43% stake in its power generation subsidiary, First Gen Corp. The conglomerate announced the decision on Monday, stating that the offer did not reflect the true value of the energy unit.

The rejected transaction would have had significant downstream consequences. Had the stake purchase proceeded, it would have likely compelled KKR to launch a mandatory tender offer for First Gen's public float at 35 pesos per share. That move would have valued the potential takeover at approximately 165.44 billion pesos, or about $2.69 billion.

In addition to the tender offer, the proposal was also tied to a petition to voluntarily delist First Gen from the Philippine Stock Exchange. Such a delisting would have removed the company's shares from public trading, a step typically taken when a majority owner seeks full control.

First Philippine Holdings currently holds a 67.84% stake in First Gen, according to LSEG data. As of Friday's market close, First Gen was valued at 110.63 billion pesos, a figure that underscores the gap between the offer price and the company's current market valuation.

The rejection leaves First Gen's listing status unchanged and removes the immediate prospect of a tender offer at the proposed price. No further details on alternative proposals or next steps were provided by the company.