First Gen defends ‘poison pill’ in P62 billion deal with Prime Infrastructure

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April 15, 2026 | 12:00am

MANILA, Philippines — First Gen Corp. has defended the alleged “poison pill” in its P62-billion hydropower deal with Prime Infrastructure Capital Inc., which shields Federico “Piki” Lopez from ouster.

In a stock exchange filing, First Gen confirmed that the definitive agreements include change-of-management-control provisions.

The provisions indicate that Prime Infra will have the right to cause First Gen to sell its Prime Hydropower Energy Inc. (PHEI) shares to Prime Infra at a discount if a change of management control with respect to First Gen occurs during the construction period of the Wawa and Pakil projects and until the first anniversary of their commercial operations date.

First Gen said the discount is 25 percent of the purchase price of the hydro projects, amounting to approximately P15.5 billion.

If Prime Infra exercises its right, it may also cause First Gen to sell its remaining shares in the gas plants to Prime Infra at the same discount of 25 percent, amounting to about P8 billion.

This brings to about P23.5 billion the amount which the Lopez family majority earlier warned that the Lopez Group is at risk of being penalized if Piki and his “designates” are removed from First Gen for whatever reason.

Under the provisions, a change of management control will occur in various instances.

These include instances such as Piki or his designee is not the CEO of First Gen, the members of the executive committee of First Gen cease to be designees of Piki, Piki is not the proxy of First Gen entitled to vote all of First Gen’s shares in the hydro project companies, Piki is not a director of First Philippine Holdings Corp., designees of Piki no longer constitute at least a majority of the members of the board of First Gen, or Piki or his designees are not First Gen directors in PHEI.

According to First Gen, a designee is a person whom Piki confirms in writing to be acceptable to him to occupy the relevant positions.

“These contractual arrangements were requested by Prime Infra and show the level of trust and confidence that Prime Infra has in FRL (Piki) and his management team,” First Gen said.

First Gen said its business and operations continue to operate business as usual, with no disruption.

The Lopez family majority, representing three branches of the clan, earlier said the poison pill contained in First Gen’s hydropower deal with Prime Infra shields Piki from ouster.

The majority said details of the poison pill, ordinarily used to block a hostile takeover, are kept from them and from shareholders at large, since it has never been disclosed to the stock exchange.

The First Gen transactions include the company’s sale of a 60-percent stake in its natural gas business to Prime Infra in 2025 for P50 billion, as well as the firm’s acquisition of a 40-percent interest in Prime Infra’s hydropower portfolio.

The Lopez family majority said First Gen originally bought 40 percent of Prime’s hydropower business for P75 billion, but shortly after, reduced its stake to 33 percent, worth a little over P62 billion.

It said the decisions to invest and to reduce were never presented to the majority shareholders for approval until the board meeting, where they were discussed for just an hour.

The majority is also questioning why Piki surrendered absolute control to Prime Infra and gave up his minority veto power.

In a separate statement yesterday, the Lopez family majority said that “only Piki and his designates are the beneficiaries of this poison pill.” 

“With maneuvers like this, how can you trust Piki? We simply do not trust him. We have decided to stop Piki, the minority, from lording it over and making decisions like he alone owns the group,” it said.

The majority also accused Piki of using issues of media giant ABS-CBN as a diversion to block his removal in Lopez Inc. and called out the tycoon for his group’s “misleading public statements” seen as “his desperate attempt to cling to power.” 

“The 68 ABSCBN retirees who he claimed received preferential treatment versus the thousands of other employees, is wrong.  The majority of these people, true to the network’s Kapamilya spirit, volunteered to defer part or all of their retirement pay so that other employees could be paid,” the majority said.

Further, the group also claimed that Piki, in refusing to fund the network, proposed instead to close down and liquidate ABS-CBN last year.