Origin rejects Brookfield’s Plan B as $12bn deal teeters

30th November 2023

By: Bloomberg


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Origin Energy rejected a backup deal proposal from Brookfield Asset Management to acquire its main energy business, with a full A$19-billion takeover expected to be rejected at a vote next week.

An alternative offer by Brookfield and EIG Global Energy Partners under which the Canada-based fund would pay A$12.3-billion for the target’s energy generation and retailing business “is not in the best interests of Origin or its shareholders,” the Sydney-based utility said Thursday in a statement, calling it “incomplete, complex, highly conditional.”

Investors are due to vote Monday on a full takeover by a Brookfield and EIG-led consortium, a deal that’s opposed by Origin’s largest investor AustralianSuper, which holds about 17% of the company — likely to be sufficient to block the transaction.

AustralianSuper, the country’s largest pension fund, has rejected Brookfield’s offers as too low, and complained that taking the firm private would deny investors an opportunity to gain exposure to the energy transition.

Origin shares fell as much as 3.3% in Sydney trading, as of 11:01 a.m. local time.

Brookfield and EIG made a revised offer last week hours before a scheduled shareholder vote on the A$9.43 per share proposal, prompting Origin to delay the meeting to December 4. Origin’s board continues to unanimously recommend that proposal, the company said.

Under the revised plans, institutional shareholders would be offered a chance to invest in the company if a full takeover is successful, according to the bidders.

If the full takeover is rejected, the utility “will continue to execute on Origin’s strategy and ambition to lead the energy transition in Australia,” and also “remain open to strategic options that enhance shareholder value,” according to the statement.

Edited by Bloomberg



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