The battle for the future of Origin Energy, one of Australia’s biggest energy companies, will be extended until early next month after takeover bidders lodged a revised offer on the eve of Thursday’s vote.
Canadian investor group Brookfield and its US-based partner EIG had offered shareholders the equivalent of $9.43 a share, valuing Origin at about $20bn.
A shareholder vote, planned for Thursday afternoon, looked set to fail to secure the required 75% after AustralianSuper vowed to use its 17.5% stake to seek to block the takeover. The superfund argued the offer undervalued Origin.
With hours to go before the vote, Origin announced the vote would now take place on 4 December to give shareholders the chance to consider the latest revised offer.
The so-called “non-binding and indicative proposal” hinges on whether shareholders reject the $9.43 a share offer. The back-up plan would amount to about $9.30 a share including dividends, and would be harder to block.
“While the alternative transaction may present an additional opportunity for shareholders to receive cash value for their shares, the board notes that the transaction appears inferior to the existing scheme,” the company said in a statement.
“The board has significant reservations as to the complexity, conditionality and differing value, and potential adverse tax outcomes to Origin and shareholders,” it said.
Origin shares, which had been in trading halt pending the update, ended the day down 9 cents, or 1.1%, to $8.33 - well short of both versions of the bid.
Brookfield had pledged to invest between $20bn-$30bn in Origin’s generation business to expedite and expand renewable energy projects assets. EIG, partly owned by the Saudi Arabian oil giant, Aramco, would snap up Origin’s gas interests.
A spokesperson for AustralianSuper said the fund would reject last-minute attempts by the consortium “to buy more time” to acquire Origin.
“This latest low-ball offer strengthens AustralianSuper’s view that the offer remains substantially below our estimate of Origin’s long-term value,” the person said.
“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 shortchange them.”
For its part, Brookfield said it remained “committed to investing in the Australian energy transition through the acquisition of Origin Energy”.
“Our alternative proposal creates a further opportunity for investors to realise compelling value for their Origin shares if the existing Scheme continues to be opposed by a handful of shareholders,” a Brookfield spokesperson said.
“Our plan is to invest up to $30 billion to decarbonise Origin, contribute meaningfully to Australia’s emissions-reductions targets and, in doing so, create jobs,” the person said, adding Brookfield had “access to capital, decades of renewables operating expertise and a global procurement presence”.