The Lopez family’s deepening legal struggle hasn’t stemmed from disputes at the personal level, rather it’s based on deeper differences about how capital is allocated. From the breakaway P29.5-billion Casecnan bid to the multibillion-peso deals with Prime Infrastructure, the story is one that some investors see as a departure from the old-fashioned financial discipline of business management, towards a strategic belief. Minority shareholders have challenged the economics and consistency of these decisions — they also have bigger issues with governance, valuation standards and who at the end creates value across the group.

The corporate bloodsport among the Lopez family’s feuding cousins, centered on Federico “Piki” Lopez and Eugenio “Gabby” Lopez III, is the culmination of what some investors see as a series of alleged poor investment choices made by the majority over the years — choices which have rubbed a portion of the shareholder base the wrong way. 

The tipping point could be the June 2025 sale of a 60% share of the Lopez conglomerate’s gas-fired power assets to ports magnate Enrique Razon’s Prime Infrastructure Capital for about P50 billion through First Gen Corporation. Months later, in February 2026, the relationship deepened, with First Gen pledging P75 billion to buy a 40% share in Prime Infra’s pumped-storage hydro portfolio, containing P62.5 billion that would be used for future project development. 

Each of these transactions, when taken in isolation, can be rationalized. The partial sale releases capital while still retaining exposure. The pumped-storage investment fits into the long-term trend of moving toward renewable energy and grid stability. On paper, these moves represent portfolio repositioning — away from fossil dependency and toward transition infrastructure.

But markets do not process transactions separately. They evaluate sequences. When viewed in a linear fashion, these moves start to form a pattern — as some investors increasingly interpret them as a reconfiguration of risk and control across strategic platforms, not as disciplined recycling of capital. 

To appreciate why this trend has attracted such close scrutiny, one has to return to the 2023 bidding for the Casecnan Hydroelectric Power Plant. 

What went before

After the expiry of its build-operate-transfer agreement in 2021, the government sought to privatize the 165-megawatt Casecnan hydroelectric facility through a competitive bidding process. By early 2023, interest was widespread, with roughly 14 groups showing interest before the selection process narrowed them down to a shortlist of serious contenders.

By the time bids were opened in May 2023, the process had already shown what the asset was worth based on what different bidders were willing to pay.

Fresh River Lakes Corp. of the Lopez group made a bid of around P29.4–P29.6 billion, the highest in the auction, significantly above the government’s minimum price of about P12.7 billion, and competing bids clustered roughly between Aboitiz’s Neptune Hydro at around P14.4 billion, and the EEI-led consortium at around P16.7 billion. The gap was striking: It was 76% higher than the next highest bidder, and more than twice the minimum price. 

Independent bidders, based on their own models, had worked their way to valuations in a fairly small band. 

First Gen’s bid did not just win — it reset the valuation range of the entire auction; it wasn’t just a premium, it was a step-change in valuation. When bids are this far apart, it usually doesn’t mean something went wrong with the process. It simply means one bidder sees the asset very differently from everyone else.

Management’s explanation was strategic. Casecnan was not simply a hydro asset but a platform — an operating plant in a country where new hydro construction will have to grapple with years of permitting, regulatory tug-of-war, and environmental constraint. To obtain it was to avoid time, risk, and uncertainty.

Minority group rattled

Nothing wrong with that logic. But strategy does not suspend arithmetic. Within months, minority shareholders began to express a competing view — formal and rooted in financial discipline. Drawing on comparable hydro operations, they estimated Casecnan’s anticipated returns, even under optimistic assumptions, to be just between 4.8% and 5.8%. 

Against an estimated cost of capital of 6.8%, the conclusion was hard to avoid: the acquisition risked being value-destructive. The critique extended beyond returns into valuation and governance. 

In a letter to the majority, the shareholders pointed out that the winning bid was not only above the government’s independently assessed enterprise value, but dramatically above competing bids clustered within a narrow range. 

In their September 11, 2023 letter, they called on the board of Lopez Holdings Corporation and its investee First Philippine Holdings and First Gen Corporation “to investigate the Casecnan project, in particular the bid-evaluation process conducted by First Gen Corporation’s management and board of directors. The boards of affected companies need to understand the shortfalls in the bid process… to be able to institute policy reforms. Such a fiasco must never happen again.”

The October 3, 2023, follow-up letter brought greater clarity to the situation. While acknowledging the asset’s strategic value, the minority demanded quantitative justification — specifically, the internal rate of return and how it exceeded the company’s cost of capital. They questioned why management emphasized delivering a “fair and equitable return” to government when the floor price had already been independently determined.

More sharply, they pointed out a governance asymmetry. Their concern is rooted in an earlier capital move by the Lopez group, when it sought to acquire minority shares within its own holding structure at prices that reflected a discount to book value. 

While such buybacks are not unusual, they effectively assign a conservative valuation to the group’s own assets. Set against this backdrop, the Casecnan acquisition presents a stark contrast. The same majority group that valued itself at a discount was willing to pay a significant premium for an external asset — well above independent benchmarks and competing bids. For minority shareholders, the issue is not just pricing, but consistency: why discipline appeared tight when dealing with internal shareholders, but far more expansive when acquiring external assets.

Long-term investment

Management’s position operates on a different framework. They said the acquisition was driven by strategic objectives: growing renewable capacity, locking in longer-duration assets, and positioning within the energy transition. The emphasis was not on near-term yield, but long-term optionality. 

In my view, this divergence isn’t just a matter of interpretation. It is a foundational, structural fault. One side is value on the basis of financial discipline — returns relative to cost of capital. The second is through strategic positioning — control of scarce assets in a constrained future. 

Vantage Point argues that, in a family-controlled conglomerate like the layered, non-flat Lopez group, the distinction in perspectives cannot remain theoretical, highlighting a structural necessity for clear governance. The corporate hierarchy — from Lopez Holdings at the top, down through First Philippine Holdings to operating subsidiaries, like First Gen, executing strategy — makes this distinction practically significant. 

Integrated leadership structures combine control and influence across the organization. When capital is deployed at one level, its consequences cascade across the system. In this context, the Casecnan project becomes a critical fault line rather than a simple transaction. The issue lies not in a failed bidding process, but in how the outcome uncovered a fundamental conflict within the organization regarding how value is defined. 

While the market was pricing the asset in a narrow band, the Lopez group priced it far outside that range. Although this appeared to be an isolated incident, investor unease was inevitable because markets evaluate decisions based on broader patterns rather than in isolation.

Unresolved conflict, ‘poison pill’

Three years on, the Casecnan acquisition has not settled the debate it triggered. Following its turnover in February 2024, the plant generated only P2.29 billion in revenues and roughly P950 million in net income. In the context of the broader group, its impact remains limited. 

Against First Gen’s P13.7 billion in recurring net income and P18.9 billion in total net income for 2024, Casecnan accounts for only 5% to 7% of earnings. More telling is the return profile. At an acquisition cost of P29.5 billion, annual earnings of P900 million to P1 billion imply a yield of just 3% to 3.5% — below estimated cost of capital of 6% to 7% (Way, way below the minority’s warning assumptions of between 4.8% and 5.8%). 

The income is further diluted by financing, including a P20-billion loan. 

The result is a nuanced verdict: It left the minority’s original concerns very much alive.

The 2023 objections from the minority shareholders were as revealing as their objections. No public reversal, no disclosed independent review that changed the outcome, and no full quantitative rebuttal of returns versus cost of capital. It was completed with approvals and integration of the asset. 

That was, in purely formal terms, a decision that went forward. But more critically, a different issue grew: an internal misalignment over how value is defined within the group became evident ― and unresolved. 

One side based itself in financial discipline, insisting that capital must clear its cost. The other was built on strategic conviction attaching value to scarcity and long-term positioning. Both stayed the same, but neither one won. This unresolved divide accounts for why the problem still exists today.

It has resurfaced as anxiety among investors, scrutiny over further deals, and a sense of family tension now seen even as the entire transaction turns into an ever more difficult matter of governance, consistency, and control.

The strain of governance became even more clear in the nature of the group’s latest deals with Prime Infrastructure. Disclosures in April 2026 pointed to the existence of a “poison pill” or a change in management control provisions woven into the deal. 

If First Gen’s existing leadership, led by Piki, is removed during the development period of both the Wawa and Pakil pumped-storage projects, Prime Infra has the power to force a sale of First Gen’s stake at a 25% discount. This equates to an estimated value loss of around P15.5 billion on its hydropower investment — and as much as P18 billion more on existing gas assets — numbers that immediately elevate the stakes from governance debate to actual financial risk.

There is something more significant about the provision than merely its size; it’s what it implies. Traditionally intended to deter hostile takeovers, the mechanism here operates differently: it ties corporate control directly to economic penalty. 

Effectively, any change in leadership could trigger a forced value transfer to an external counterparty. For its critics in the Lopez group, this exacerbates a bigger worry — that the recent capital allocation decisions aren’t simply aggressive in pricing, but are structurally designed to protect management control as well. 

When viewed with Casecnan, the question is more than whether assets were purchased for a premium, but indeed governance itself has been engineered to muddy the distinction between strategic positioning and control entrenchment.

Corporate wound that doesn’t heal

The Casecnan and Prime Infrastructure deals and now the discovery of the “poison pill” are now part of a much broader approach to capital allocation — where companies aren’t shy about paying strategic premiums for assets that align with long-term themes, even when near-term financial metrics don’t appear as attractive. 

That change is vital for investors. The trustworthiness of a conglomerate is not determined only by the assets it holds, but how much focus it gives to its investments. 

Markets reward clear strategic discipline. But as confidence wavers, doubts emerge. Questions are now surfacing, not only from minority shareholders, but from within the Lopez family itself. More than just a failed transaction, the issue indicates a deeper, structural failure. (READ: ABS-CBN ups the emotion in latest statement on Lopez cousins’ feud)

Ultimately, the way a company allocates its funds reflects its operating strategy, revealing its core beliefs and commitment level. When these foundational beliefs are no longer shared within the organization, the situation moves beyond mere disagreement. Instead, it exposes a deeper conflict regarding leadership, strategic vision, and the dedication required to pursue future goals. – Rappler.com

This analysis is anchored on primary disclosures and contemporaneous records: First Gen Corporation’s 2024 Annual Report and 1Q2025 investor briefings (covering Casecnan revenues, earnings contribution, and acquisition-related financing), operating data from Fresh River Lakes Corp. following the plant’s turnover on February 26, 2024, and official PSALM and Department of Finance releases on the May 16, 2023 bidding results. It also draws from minority shareholder letters dated September 11 and October 3, 2023, which detail return assumptions and governance concerns, alongside First Gen’s regulatory filings and public statements on its Prime Infrastructure transactions in June 2025 and February 2026. All figures are presented in Philippine peso equivalents using prevailing exchange rates at the time to ensure comparability and clarity.

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