First of two parts
Barito Renewables’ unsolicited bid for Energy Development Corporation arrives while the Strait of Hormuz is closed, oil prices are volatile, and the Lopez cousins are fighting over who controls the family’s energy empire. Whose stake would the Indonesian tycoon actually buy?
On Wednesday, July 15, First Gen Corporation confirmed to the Philippine Stock Exchange what a Bloomberg report had already pushed into the market: Indonesia’s PT Barito Renewables Energy Tbk had made an unsolicited, indicative, and non-binding offer to acquire Energy Development Corporation (EDC) at an equity value of about US$5 billion. First Gen told the exchange that there have been no discussions between the parties, that no agreements have been signed, and that no financial advisers have been hired for any transaction.
Equity value, in plain terms, is the price tag on the company’s ownership. It is what Barito is signaling all of EDC’s shares put together are worth, on top of the company’s debts, which a buyer would also carry and which is why Indonesian reports have put the total cost of the deal at about US$7 billion. If a sale were ever negotiated and closed, the amount that actually changes hands would depend on the final price, and who receives it would depend on which shareholders sell.
