Brookfield, EIG boost Origin Energy takeover bid

Canadian investment giant Brookfield, in a consortium with US investor EIG Partners, has boosted its takeover offer for Origin Energy, increasing its bid for Australia’s largest energy utility to $9.53 a share and declaring it their final bid under the scheme deal.

The announcement comes just days after Origin’s largest shareholder, superannuation giant AustralianSuper, said it would reject the prior buyout offer from Brookfield and EIG, describing it as “substantially below” its estimate of long-term value for the energy generator and retailer. The position taken by AustralianSuper, which owns 13.7% of Origin, was supported by several other institutional shareholders.

The Brookfield-led consortium is now offering Origin shareholders $9.53 per share, up 8.2% from the prior offer of $8.81 apiece. The revised bid pushes Origin’s valuation closer to $20 billion.

Importantly, the consortium said the increased offer is its “best and final” proposal meaning it cannot be increased unless a rival offer emerges.

“The fact that no competing offer has surfaced in nearly a year, together with the massive premium in our proposal, evidences the fact that we have identified every element of value available,” EIG Chief Executive Officer Blair Thomas said in a statement.

Origin’s board said it unanimously recommends shareholders vote in favour of the revised deal at the scheme meeting which is currently scheduled for 23 November 2023.

“The revised consideration is now above the top end of the independent expert’s 30 June 2023 valuation range,” Origin Chairman Scott Perkins said in a statement. “We encourage all shareholders to vote in favour of the scheme.”

Perkins said while Origin is already well placed to navigate the energy transition, Brookfield’s ownership will accelerate the build out of cleaner energy at a speed and scale much greater than Origin’s existing plans.

Brookfield has said it will invest up to $30 billion in Origin in the next decade to fund the company’s energy transition, using that capital to develop up to 14 GW of new renewable generation and storage assets by 2033.

Brookfield Asia Pacific Chief Executive Officer Stewart Upson said with its current funding sources and as a public company Origin will not to be able to match the level of investment at the scale and speed as it could achieve under Brookfield’s ownership.

“Under Brookfield’s ownership, we will fund and facilitate the required investment,” he said. “Our capital is committed and not contingent on any future capital raise processes.”

“The combination of Brookfield and Origin in Australia will fast-track significant decarbonisation in the National Electricity Market. We also intend to support a local manufacturing industry that will make components for the renewables development industry in Australia, creating jobs.”