KKR Exits First Gen for P25.8B, Gateway's Strategy Eyed

Global investment giant Kohlberg Kravis Roberts & Co. (KKR) has divested its entire stake in Lopez-led First Gen Corp. for P25.77 billion, weeks after its bid to increase its ownership in the power firm was rejected. KKR, through its subsidiary Valorous Asia Holdings Pte. Ltd., sold 715.86 million shares—equivalent to a 19.9 percent economic interest in First Gen—to Angsana Finance Ltd., a subsidiary of Cayman Islands-based Gateway Holdings Ltd. A Philippine Stock Exchange (PSE) filing revealed that the block sale was executed on September 10 at P36 per share, significantly higher than First Gen’s closing price of P23.70 on September 11. Following the transaction, KKR senior advisor Manolo Michael de Guzman resigned as a director of First Gen. Bank of America advised KKR on the deal. "KKR had been in First Gen since 2020, so it was about time for it to exit and realize a return on its investment," said Juan Paolo Colet, managing director at China Bank Capital Corp., when asked for insights. While the transaction is not expected to have any immediate financial impact on First Gen, Colet noted that Gateway’s entry could influence how tycoon Federico Lopez charts the power firm’s strategic direction. Gateway is an alternative investment manager focused on emerging markets across South and Southeast Asia, the Middle East, and Africa. "Given Gateway’s entry price of P36 per share, they would need to unlock significant value to make a good return, and one way to do that is through an M&A (merger and acquisition) either at the First Gen or EDC (Energy Development Corp.) level," Colet added. KKR’s divestment came after First Philippine Holdings Corp., the Lopez Group’s holding firm, rejected KKR’s proposal to acquire a portion of its stake in First Gen. FPH currently owns 67.84 percent of First Gen. KKR had sought to buy an 8.43 percent stake in First Gen held by FPH and launch a voluntary tender offer for the power firm’s entire 11.67 percent public float at P35 per share.