Origin Energy's Stand Against Brookfield's Takeover Bid of AU$19 billion - Kalkine Media

November 30, 2023 12:53 PM AEDT | By Team Kalkine Media
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In the realm of high-stakes corporate maneuvers, the recent tussle between Origin Energy Ltd. (ASX: ORG) and Brookfield Asset Management Ltd. has captured widespread attention. Origin Energy's resolute rejection of a backup deal proposed by Brookfield, in addition to its imminent dismissal of a full AU$19 billion takeover, sets the stage for an intriguing showdown at the upcoming vote.

A Clash of Visions: The Bid Rejection Saga Unfolds

The rejection was announced in response to an alternative offer made by Brookfield and EIG Global Energy Partners. This offer, entailing a payment of AU$12.3 billion for Origin's energy generation and retailing business, was outrightly dismissed by Origin Energy. The Sydney-based utility labeled the proposal as "incomplete, complex, highly conditional," asserting that it did not align with the best interests of Origin or its shareholders.

The Investor Standoff: AustralianSuper's Dissent

The impending vote on the Brookfield and EIG-led consortium's full takeover faces a significant hurdle in the form of AustralianSuper, Origin's major investor holding approximately 17% of the company. AustralianSuper has vehemently opposed the takeover, deeming the offers as undervalued and the privatization move detrimental to investor interests, especially amidst the ongoing energy transition.

The Impact and Market Reaction

Following the developments, Origin Energy witnessed a notable dip in its shares, marking a 2.02% decline in Sydney trading. This plummet in stock value reflects the market's response to the uncertainty surrounding the company's future amidst the proposed takeover and subsequent rejections.

The Reworked Offer: A Bid for Redemption

Amidst the contentious atmosphere, Brookfield and EIG presented a revised offer, compelling Origin Energy to adjourn the scheduled shareholder vote to 4 December 203. Despite this, Origin's board remains steadfast in endorsing the AU$9.43 per share proposal, advocating for its acceptance.

Future Prospects: The Path Ahead

The revised plans by the bidders extend an opportunity for institutional shareholders to invest in Origin if the full takeover materializes. However, in the event of a rejection, Origin reassures its commitment to its ongoing strategy of leading the energy transition in Australia. Additionally, it remains open to exploring strategic alternatives aimed at augmenting shareholder value, signaling a resilient stance regardless of the vote's outcome.

Conclusion: Navigating Uncharted Terrain

The standoff between Origin Energy and Brookfield illustrates the complex interplay between corporate strategy, investor interests, and the evolving energy landscape. As the impending vote looms, the outcome holds implications not only for the involved entities but also for the broader energy sector, reflecting the intricate dynamics shaping its future trajectory.


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