A consortium — comprised of Brookfield Asset Management, its institutional partners, listed affiliate Brookfield Renewable Partners and global institutional investors — has increased its bid to acquire Origin by $0.69 per share, or $1,200 million, to $9.53 per share.
The global institutional investors involved include: GIC, Temasek and MidOcean Energy — an LNG company formed and managed by EIG.
The revised total cash payment is above the Independent Expert’s Report’s (IER) valuation range of $8.45 to $9.48 share and represents an increase of approximately 8 per cent above its previous proposal of $8.81 per share.
Brookfield Asia Pacific CEO Stewart Upson said the company had worked hard to deliver the best offer reflecting the current circumstances of the company and the revised offer was the company’s final offer.
“Or proposal is now higher than the top of the valuation range identified in the IER and is endorsed by the Origin board.
“We believe that for Australia to meet its climate targets, organisations such as Origin need to embark upon an accelerated transition plan,” said Upson.
The Brookfield consortium plans to invest up to $30 billion through Origin over the next 10 years.
Origin is responsible for the operation of the Australia Pacific LNG gas fields and main gas transmission pipeline but also has two renewable energy power generation assets with a combined capacity of 270 megawatts.
Origin’s existing plan is to build four giga-watts of renewable energy by 2030, resulting in a slower transition to net zero compared to Brookfield’s proposed investment program.
With its current funding sources and as a public company, Origin will not 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. Our capital is committed and not contingent on any future capital raise processes.
“We firmly believe that Origin will be best placed to transition its business in a private setting with the backing of Brookfield and its institutional partners, and this will bring material public benefits to Australia,” said Upson.
According to Upson, the combination of Brookfield and Origin will fast-track significant decarbonisation in the National Electricity Market — and consumers will ultimately benefit from an accelerated transition with reliable, lower-risk and lower-cost power.
“We also intend to support a local manufacturing industry that will make components for the renewables development industry in Australia, creating jobs,” said Upson.
EIG CEO Blair Thomas said: “The consortium has put its best possible offer forward to Origin’s investors.
“The additional value being offered further strengthens the attractive cash premium for their shares and represents a compelling opportunity for investors to crystalise certain value for their investment.
“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,” said Thomas.
The Origin Board continues to unanimously recommend that shareholders vote in favour of the scheme at the scheme meeting, in the absence of a superior proposal and subject to the IER continuing to conclude that the scheme is in the best interests of Origin shareholders.
The proposed transaction has been approved by the Australian Competition and Consumer Commission and remains subject to shareholder and other regulatory approvals.
Origin Energy will still seek to hold the scheme meeting as currently planned on 23 November 2023, however, the implementation date of the scheme has been extended to 31 January 2024.
