By Scott Murdoch and Sameer Manekar
SYDNEY (Reuters) -Australia’s Origin Energy said on Thursday it had received a sweetened takeover bid from a Brookfield consortium, valuing the power producer at A$16.40 billion ($10.49 billion), days after its top shareholder rejected the previous offer.
The consortium led by Canada’s Brookfield, which also includes EIG’s MidOcean Energy, is now offering Origin shareholders A$9.53 per share, up 8.2% from the prior offer of A$8.81 apiece, and a 5.1% premium to its last closing price.
The consortium said the increased offer was its “best and final” proposal meaning it cannot be increased unless a rival offer emerged.
“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 CEO Blair Thomas said in a statement.
Top shareholder AustralianSuper on Tuesday had rejected the prior offer, saying it was “substantially below” its estimate of long-term value for Australia’s biggest energy retailer.
The deal requires 75% support from the votes cast at a shareholder meeting, scheduled for Nov. 23, meaning AustralianSuper’s holding in Origin – the biggest at 13.68% – could be enough to scupper it if not all shareholders vote.
AustralianSuper did not immediately respond to a request for comment.
Origin’s board said it unanimously recommended shareholders vote in favour of the revised deal in the absence of a superior proposal.
The bid is made up of two currencies, including A$6.59 and a U.S. dollar component of $1.86 plus a fully franked special dividend of 39 Australian cents that Origin said its board intends to pay.
At A$9.53 per share, the new offer is above the $A8.45 to A$9.48 per share valuation range contained in an independent expert’s report examining the previous offer.
However, the report also outlined a “roll forward” calculation that said Origin’s shares could be worth an additional 40 Australian cents by the time a potential takeover is due to occur. A recent report from Macquarie said the consortium bid should be closer to A$10 per share.
Brookfield Asia Pacific CEO Stewart Upson said the consortium planned to invest $A20 billion to A$30 billion in Origin in the next decade to fund the company’s energy transition to achieve net zero emissions.
“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,” he said.
($1 = 1.5640 Australian dollars)
(Reporting by Sameer Manekar in Bengaluru and Scott Murdoch in Sydney; Editing by Chris Reese and Jamie Freed)
