The revised bid retains the value of Origin shares at A$9.43 ($6.19) per share but allows some investors to stay invested in the energy markets business that would be owned by Brookfield
Origin Energy is an integrated power generator and energy retailer. (Credit: Nikola Johnny Mirkovic on Unsplash)
Origin Energy’s major shareholder AustralianSuper said it will reject a revised offer made by a consortium led by Brookfield to acquire the Australian energy retailer for $10.6bn.
The revised bid retains the value of Origin shares at A$9.43 ($6.19) per share but allows some investors to stay invested in the energy markets business that would be owned by Brookfield.
Brookfield’s consortium partner EIG Partners would acquire Origin’s integrated gas business, which owns the 27.5% stake in Australia Pacific LNG (APLNG).
If the offer fails to attain 75% shareholder support, an alternative proposal would be placed, pursuant to which Brookfield will acquire Origin’s energy markets business for A$12.3bn.
In such a case, EIG would make an off-market proposal to acquire the remaining of Origin, which would centre on the APLNG stake.
The Australian superannuation fund, which owns more than 17% of Origin Energy, said the latest offer remained considerably below its estimate of the long-term value for Origin.
Earlier this month, AustralianSuper rejected an unsolicited offer from the Brookfield and EIG consortium and confirmed that it will be voting against the takeover of Origin Energy (Origin).
The superannuation fund, through a letter, said that its position will remain unchanged for the voting to be held on 23 November 2023, calling the offer as substantially undervaluing Origin.
The meeting of Origin shareholders scheduled for 23 November has been delayed until 4 December 2023 to consider the new offer.
AustralianSuper told Reuters: “The latest ‘low-ball offer’ reaffirmed its view that the bid remained substantially below its estimate of the energy retailer’s long-term value.”
“AustralianSuper is resolute the value and future value of Origin is better in the hands of AustralianSuper members and other shareholders than a private equity consortium planning to short-change them.”
Brookfield restated its plans to invest up to A$30bn to reduce Origin’s carbon footprint and contribute meaningfully to Australia’s emissions reduction targets.
Under its revised bid, Origin shareholders would receive A$9.08 per share, totalling $10.2bn, with an additional A$0.22 a share if EIG succeeds in acquiring 90.1% of Origin.
EIG CEO Blair Thomas told Reuters: “What is frustrating is no point in time have they said what they would find acceptable. We are going to provide an alternative where the majority of shareholders can control their own destiny.”