Origin Energy Showdown: Monday looms as a pivotal day for the fate of Australia’s Origin Energy, as the outcome of the Brookfield consortium’s ambitious $10.6 billion bid will be officially unveiled. This protracted, year-long pursuit faces a wave of skepticism from investors, who are widely expected to cast their votes against the bid. The anticipation of this rejection has already manifested in Origin’s shares, which took a hit, shedding 3% to reach A$7.94 in early trade on Monday, marking a fresh nine-month low for the company.
The prevailing sentiment among investors seems to indicate an expectation that Brookfield and its bidding partner, EIG, may opt to walk away following the anticipated vote against their proposal. Adding to the skepticism is the firm stance of AustralianSuper, a colossal pension fund with assets totaling A$300 billion ($198 billion). As Origin’s largest shareholder, owning approximately 17% of the company, AustralianSuper has unequivocally declared its intent to reject the A$9.39 per share offer, a move that could prove pivotal in swaying the vote.
For a bid to succeed, it requires a minimum of 75% support from the votes cast at the investor meeting in Sydney. The odds, it seems, are stacked against Brookfield’s consortium. The situation took an interesting turn on November 23 when the vote was adjourned after the consortium submitted a revised proposal. At that time, Origin disclosed that proxy votes had already indicated a likely failure for the bid if the meeting proceeded as planned.
Also Read: Origin Energy Turbulent Bid: Shareholder Standoff Unfolds Amidst Complex Offers
“The market has already factored in the bid failing, and the stock is roughly fairly valued in our opinion, so I wouldnt expect much impact if the bid fails,” commented Morningstar analyst Adrian Atkins. However, he also noted a potential silver lining, stating, “If the Brookfield consortium comes back with a hostile off-market offer, there could be upside to the share price.”
Luke Edwards, the head of renewable energy and transition at Brookfield Australia, injected an element of uncertainty into the situation on Friday. He mentioned that if the deal is indeed voted down, the consortium would need to carefully assess whether a new government plan aimed at reshaping energy markets could adversely impact their perspective on Origin’s value. “We will do this work before considering whether to continue pursuing a proposal to acquire Origin Energy or the Origin Energy Markets business,” he emphasized.
Origin, keeping its cards close to its chest, did not respond to a request for comment ahead of the crucial vote. The company’s board, last week, rejected a revised back-up bid from the Brookfield consortium, citing its complexity and highly conditional nature.
The unfolding drama surrounding Origin Energy and the Brookfield bid is set against a backdrop of uncertainty and strategic maneuvering. The decision made by investors on Monday will not only shape the immediate future of Origin but could also have broader implications for the energy sector and investment landscape in Australia. As the financial community eagerly awaits the outcome, the intricate dance between bidders and shareholders adds an intriguing chapter to the corporate narrative of Origin Energy
Our Reader’s Queries
Who is taking over origin energy?
Origin Energy Limited has issued an update regarding the proposed acquisition of the company by a consortium of investors led by Brookfield and EIG. The acquisition will be carried out through a Scheme of Arrangement.
Is Origin energy a good investment?
Despite the difficulties, the market’s strong interest in Origin Energy presents an opportunity to unlock shareholder value. Our analysis reveals that Origin Energy’s current market position and foray into renewable energy provide promising long-term growth prospects, making it a compelling investment option.
What is the alternative to origin energy?
AGL Energy, Santos, NuEnergy Gas, and NeoSolar Energia are among Origin Energy’s rivals and comparable firms.
What is the annual revenue of origin?
Origin Energy’s latest financial reports reveal that the company’s current revenue (TTM) stands at an impressive $10.83 B. In 2023, the company’s revenue increased to $10.83 B, surpassing the previous year’s revenue of $9.89 B. Revenue is the total income generated by a company through the sale of goods or services.