Rebuffed KKR exits First Gen in P26-B deal

US-based private equity group KKR has ended its six-year run with First Gen, disposing of its entire stake for P25.77 billion just weeks after its unsuccessful bid for a larger foothold in the energy giant.

Based on a regulatory filing on Monday, KKR, through Singapore-based subsidiary Valorous Asia Holdings, sold about 715.86 million shares priced at P36 per share to Angsana Finance Ltd., another private venture firm registered in Cayman Islands.

Angsana Finance also has a huge backer, Gateway Partners, an alternative investment manager with interests in emerging markets across Southeast Asia, South Asia, the Middle East and Africa.

The transaction represents a 19.9-percent economic interest in First Gen.

This developed as KKR’s bid to acquire an additional 8.43 percent in the Lopez-led firm was rejected by First Philippine Holdings Corp., First Gen’s parent firm, which said the offer did not reflect the latter’s true value.

“KKR had been in First Gen since 2020, so it was about time for it to exit and realize a return on its investment,” Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., said in a message on Monday.

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This was echoed by Toby Allan Arce, head of sales trading at Globalinks Securities and Stocks Inc., saying the move was favorable for KKR as the shares had been disposed at a higher price—“substantially above” the P26.90 regular-market closing price immediately preceding the transaction. The figure was also slightly higher than the P35 per share KKR previously proposed to increase its stake in First Gen.

“Given that KKR first invested in First Gen in 2020, monetizing the investment at a substantial negotiated premium after its expansion proposal was rejected would be consistent with normal private-equity capital recycling rather than necessarily signaling diminished confidence in the underlying business,” Arce said.

First Gen is a power firm with interest in gas facilities and a growing renewable energy portfolio.