Origin Energy Limited has received a proposal from Brookfield Asset Management Inc., together with its affiliates and their managed funds and MidOcean Energy, an LNG company formed and managed by EIG (the Consortium), to acquire Origin at a price of $9.00 cash per share. The proposal values Origin at $18.4 billion on an enterprise value basis.

The proposal follows an earlier proposal from the Consortium to acquire Origin for $7.95 cash per share on 8 August 2022. On 18 September 2022, the Consortium made a further proposal to acquire Origin at an indicative price of $8.70 to 8.90 per share.

Given the preliminary and highly conditional nature of these initial indicative proposals, and following the signing of a confidentiality agreement containing customary disclosure restrictions and standstills, the Board undertook a period of limited discussions and information sharing to address certain conditions and ascertain whether the Consortium could develop a proposal which was likely to be in the best interests of Origin shareholders.

Following that engagement, the new bid represents an increase of 16 per cent on its initial proposal and at a premium to Origin’s last trading share price (as at 9 November 2022).

The Consortium proposes that Brookfield would acquire Origin’s Energy Markets business and MidOcean would acquire the Integrated Gas business.

Based on current information and market conditions, if the Consortium makes a binding offer at $9.00 cash per share, the Origin Board intends to unanimously recommend that shareholders vote in favour of the proposal, in the absence of a superior proposal.

This is subject to the parties entering into a binding scheme implementation agreement on terms acceptable to Origin. It is also subject to an independent expert concluding (and continuing to conclude) that the proposed transaction is fair and reasonable and in the best interests of Origin shareholders.

Origin Chairman, Mr Scott Perkins said, “This proposal confirms that Origin, its operations and management team represent a highly strategic platform, well placed to benefit from the energy transition. Our confidence in Origin’s prospects underscored our engagement with the Consortium and delivered a material increase on their initial offer. While the due diligence process advances, we will remain focussed on the successful execution of our strategy.”

Origin CEO, Mr Frank Calabria said, “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. At the same time, we have a dedicated, engaged and highly-skilled workforce who are committed to delivering good outcomes for our customers and communities. We believe Origin is in a strong position to lead the energy transition, capture opportunities and create value for shareholders.”

An exclusivity agreement has been signed and the Consortium’s due diligence is expected to take eight weeks.