First Gen Confirms $5 Billion Takeover Proposal for EDC as Indonesia's Barito Group Eyes Philippine Geothermal Leader

 

First Gen Weighs $5 Billion Offer for Energy Development Corp. Amid Strategic Shift

First Gen Corp. has acknowledged receiving an unsolicited takeover proposal worth approximately $5 billion for its subsidiary, Energy Development Corp. (EDC), placing one of the Philippines' most valuable renewable energy assets at the center of a potentially transformative transaction.

The proposal came from PT Barito Renewables TBK (BREN), the clean energy arm of Indonesia's Barito Group. According to First Gen's disclosure to the Philippine Stock Exchange, the offer is merely indicative and non-binding. It remains subject to due diligence, negotiations, execution of definitive agreements, and the required corporate and regulatory approvals.

The company also emphasized that no formal negotiations have begun. It stated that neither transaction advisers have been appointed nor agreements executed at this stage, underscoring that the proposal remains in its preliminary phase.

Should the acquisition move forward, the financial implications for First Gen could be substantial. The company owns an economic interest of about 45.8 percent in EDC. At the proposed valuation, that stake could generate approximately $2.29 billion, or around P141 billion based on prevailing exchange rates.

Such proceeds would significantly strengthen First Gen's financial position and provide additional capital for future investments in renewable energy. Large energy companies often recycle capital from mature assets into emerging technologies and higher-growth opportunities, much like replacing an established engine with a more efficient one to improve long-term performance.

Investment analysts believe the proposal deserves serious consideration. China Bank Capital Corp. Managing Director Juan Paolo Colet noted that monetizing the geothermal business could unlock value that has not been fully reflected in First Gen's market valuation. He added that the proceeds could be returned to shareholders while also supporting investments in more profitable clean energy ventures.

The market reacted swiftly after news of the proposal surfaced. First Gen shares surged to an intraday high of P22.30 before ending the trading session at P19.80, representing an 18.42 percent increase from the previous closing price of P16.72.

Despite the positive market response, questions remain over whether the Lopez-led company and its investment partner, GIC and Macquarie Group, are prepared to sell. COL Financial Chief Equity Strategist April Lee-Tan said the outcome will ultimately depend on valuation rather than strategic interest alone, suggesting that the right price will be the determining factor.

EDC occupies a dominant position in the Philippine renewable energy sector. The company operates more than 1,000 megawatts of geothermal generating capacity, accounting for over half of the country's total geothermal power production. Its extensive portfolio has made it a cornerstone of the nation's clean energy supply.

BREN is also a major player in Southeast Asia's geothermal industry. Its renewable energy assets include three geothermal facilities in West Java with a combined capacity of 886 megawatts, representing about 38 percent of Indonesia's geothermal market, according to IDN Financials.

The takeover proposal arrives after First Gen's major portfolio reshuffle in late 2025. In November of that year, the company completed the sale of its controlling interest in its natural gas business to Prime Infra, led by businessman Enrique Razon Jr., in a transaction valued at P50 billion. That deal became one of the most closely watched developments within the Lopez Group and marked a significant shift in the company's long-term investment strategy.

Whether the proposed acquisition proceeds or not, the offer highlights the increasing value of geothermal assets across Southeast Asia as regional demand for reliable renewable energy continues to expand.