Brookfield Asset Management leads fresh $18b bid for Origin Energy
Origin Energy has urged shareholders to vote in favour of the latest offer from the Brookfield Asset Management consortium.
Brookfield Asset Management and its affiliates have launched another takeover bid for Origin Energy (ASX: ORG), with this latest offer now worth more than $18 billion and would see Origin split into separate gas export and electricity businesses.
The latest takeover offer of $9 cash per share is significantly greater than the consortium’s previously tabled offers, $7.95 cash per share in August, as well as another offer of $8.70 to $8.90 per share in September.
Origin chairman Scott Perkins said the latest offer highlights the company’s strong stance within the energy market.
“Our confidence in Origin’s prospects underscored our engagement with the consortium and delivered a material increase on their initial offer,” he said.
“While the due diligence process advances, we will remain focussed on the successful execution of our strategy.”
In the company’s statement, Origin urged shareholders to vote in favour of the latest offer tabled by the consortium.
“Based on current information and market conditions, if the consortium makes a binding offer at $9 cash per share, then it is the current intention of the Origin board to unanimously recommend that shareholders vote in favour of the proposal, in the absence of a superior proposal,” it said.
If the bid is successful, Brookfield will acquire Origin’s energy markets business. The other member of the consortium MidOcean, owned by US energy investor group EIG, would take control of Origin’s integrated gas business.
MidOcean chief executive officer De la Rey Venter said liquefied natural gas (LNG) was fundamental in aiding the global energy transition.
“Origin’s integrated gas business – which would build on MidOcean’s existing investment in Australia – will help enable broader decarbonisation efforts in the region by supplying critical natural gas and LNG to the domestic and global markets for decades to come,” he said.
EIG has its sights set on Origin’s 27.5% stake in the Queensland joint venture, Australia Pacific LNG.
The parties have around six weeks to come to a binding decision.
Origin continues efforts to turn green
Origin’s latest announcement reaffirms its green push, as it aims to make a swift exit from fossil fuels, which included announcing the closure of Australia’s largest coal-fired power station in 2025 – seven years earlier than planned.
Origin also announced the installation Australia’s largest battery, a 700-megawatt battery on the existing site, as well as many gas-fired peaking plants.
Origin chief executive officer Frank Calabria said the company was in a strong position to continue executing its strategy.
“Over the past year, Origin has executed a number of important strategic initiatives that have strengthened the balance sheet, sharpened our strategic focus and positioned the company to prosper from the energy transition,” he said.
“We believe Origin is in a strong position to lead the energy transition, capture opportunities and create value for shareholders.”
Brookfield’s second go at Australia’s energy market
Brookfield said it will invest a minimum of $20 billion over the next seven years in an effort to continue turning Origin as green as it can be and position the giant as Australia’s leading ‘greentailer’.
Origin is also Brookfield’s second attempt at the Australian energy market, after its first attempt was unsuccessful.
Brookfield partnered up with billionaire Mike Cannon-Brookes earlier in the year, in a bid to take over AGL Energy (ASX: AGL).
Negotiations fell apart from the outset amid concerns raised over pricing.
This time around, Brookfield and its new partner, EIG, tabled a significant offer to help the deal get over the line.