Origin grants Brookfield buyout consortium more due diligence time as concerns grow

“Gentailer” Origin Energy has granted the consortium behind its $18.4 billion (USD 12.8b) takeover bid, led by Brookfield Asset Management and US private equity firm EIG Partners, an extra week of exclusive due diligence. Neither reason nor timeline were offered by Origin’s brief ASX statement, fuelling concerns about the highly-priced deal.

January 17, 2023 Bella Peacock

The bid values Origin at $18.4 billion.

Image: iseekplant

Australia’s Origin Energy has again extended the exclusive due diligence period for its takeover consortium comprising of Canada’s Brookfield Asset Management and United States-based gas supplier MidOcean Energy, managed by US investment giant EIG Partners.

Origin Energy’s stock price in the six months to January 17. It price jumped in November upon news of the buyout offer.
*Image: ASX*

In November, the consortium announced its $9-a-share cash offer, which continues to represent a significant premium on Origin’s current share prices. At the time, Origin’s board said it would “unanimously recommend” shareholders vote in favour of the $18.4 billion takeover bid, which would rank among the biggest private-equity-backed buyouts of an Australian company.

However, concerns around the deal are growing, given this is the second time the consortium’s exclusive due diligence period has been extended. It was first extended in December, and that period will now push out to January 24.

Origin’s brief statement to the Australian Stock Exchange (ASX) offered no reason for why the extension was requested, nor any timeline for when Brookfield and EIG are expected to finalise.

As part of the takeover, the consortium said it planned to divide Origin’s business and invest another $20 billion by 2030 to support the gen-tailer’s transition to clean energy.

In the split, Brookfield would take Origin’s energy generation and retailing businesses while MidOcean would acquire Origin’s gas business, including its 27.5% a stake in Australia Pacific LNG.

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