US firm buys FGen stake for ₱7.285 B

New York Stock Exchange-listed KKR & Co., Inc. will be acquiring the common shares of First Gen Corporation with a premium at ₱22.50 per share – and to be executed via a tender offer that could fetch maximum proceeds of ₱7.285 billion for the Lopez firm.

American investment firm KKR will be pursuing tender offer via its regional subsidiary Valorous Asia Holdings Pte. Ltd., a corporate vehicle that it incorporated in Singapore in March this year.

In a report filed with the Philippine Stock Exchange (PSE), it was stipulated that Valorous “is making the tender offer to acquire by way of secondary sale from existing shareholders, a minimum of 215,874,870 issued and outstanding common shares representing approximately 6.0% and up to 323,812,305 issued and outstanding common shares representing a maximum of approximately 9.0% of the total issued and outstanding common shares.”

“The tender offer of ₱22.50 per common share provides existing shareholders an immediate return on their investment at an attractive premium to the company’s current trading price and historic trading prices of the common shares,” KKR said.

A premium of 26.83% has been set to First Gen’s closing price on May 22; then a premium of 35.05% to its 3-month volume weighted average price (VWAP) to May 22; and a premium of 19.23% to First Gen’s 6-month VWAP to May 22.

The tender offer will kick off on May 27 at 9 a.m. and will close on June 24, 2020; with an option for Valorous to “extend the tender offer period with prior approval from the Securities and Exchange Commission.”

The American firm’s financial advisor for this transaction is BDO Capital & Investment Corporation, which has issued a letter “confirming that the bidder (KKR) has made appropriate arrangements for funds to be available to satisfy full payment of the tender offer shares – including related commissions, charges, fees and expenses payable by the bidder in connection with the tender offer.”