Origin's (ASX:ORG) share price skyrockets following AU$18.4B takeover offer - Kalkine Media

November 10, 2022 01:46 PM AEDT | By Sonal Goyal
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Highlights:

  • Brookfield and MidOcean have made a bid to acquire Origin Energy for the proposed price of AU$9 cash per share.
  • As per the proposal, Brookfield would buy Origin’s energy markets business and MidOcean would handle the integrated gas business.
  • Origin Energy’s share price shot up by over 34% on Thursday (10 November 2022) at 11:26 AM AEDT.

The share price of Origin Energy Limited (ASX:ORG) shot up on Thursday (10 November 2022) after the company announced that it had received a takeover offer from Brookfield Asset Management Inc. and MidOcean Energy (the consortium). The consortium’s proposal values the electricity business operator at AU$18.4 billion on an enterprise value basis.

Origin’s shares were spotted trading 34.25% higher, at AU$7.80 per share, at 11:26 AM AEDT. Meanwhile, the benchmark index, ASX 200 Utilities (INDEXASX:XUJ), recorded a rise of 13.32% to 8,317.00 points.

Including today’s gain, the Origin share price has increased by 55.60% in the past 12 months. On a year-to-date basis, it has zoomed up by 45.15% and recorded a rise of 38.43% in the past month.

Details of the indicative proposal

Brookfield, along with its affiliates and their managed funds and MidOcean Energy, has proposed a bid to acquire 100% issued shares in Origin at a price of AU$9 cash per share. According to the proposal, Brookfield would acquire the energy market business of Origin and MidOcean would buy the integrated gas business. The proposal received from the consortium is a non-binding, conditional, and indicative proposal.

As reported, the offer price represents a 54.9% premium on the last closing price of AU$5.81 apiece (as of 9 November 2022).

According to the ASX announcement, the price payable would reduce if Origin paid dividends before implementing the proposed scheme of arrangement. On the other hand, the offer price would rise by AU$0.03 per month if the implementation happened later than 15 May 2023.

This is not the first time that Origin has received a takeover proposal from the consortium. On 8 August 2022, the consortium offered to acquire the group for AU$7.95 cash per share. On 18 September 2022, a further proposal was made for AU$8.70–AU$8.90 per share.

Origin informed the market that the indicative proposal is subject to multiple conditions, like satisfactory completion of due diligence, approval from the Foreign Investment Review Board and the Australian Competition and Consumer Commission (ACCC), and a unanimous board recommending that Origin shareholders vote in favour of the proposal.


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