Australia’s Origin receives revised takeover offer from Brookfield and EIG

Australian energy firm and APLNG shareholder, Origin, has received a revised takeover offer from a consortium consisting of Canada’s Brookfield Asset Management and a unit of US-based energy investor EIG.

Brookfield and EIG’s LNG unit MidOcean Energy first made an offer in August last year to acquire Origin for A$7.95 cash per share. Subsequently, they raised the offer to A$9.00 cash per share in November last year, and revised this offer again to A$8.90 per share in February this year.

The consortium and Origin entered into a binding deal in March this year and the takeover received approval from Australia’s competition regulator in October.

Brookfield and EIG also recently increased the cash consideration offered to all Origin shareholders under the scheme of arrangement to A$9.43 per share, valuing Origin at about A$20 billion.

Upon closing of the transaction, Brookfield, its institutional partners and investors would own Origin’s energy markets business, Australia’s largest integrated power generator and energy retailer.

Moreover, EIG’s MidOcean would separately own Origin’s integrated gas segment including its upstream gas interests and the 27.5 percent stake in Australia Pacific LNG (APLNG).

Shareholder meeting moved to December 4

Origin announced in a statement that it has received on Wednesday a non-binding and indicative proposal from the consortium to amend the current scheme.

Under the new revised offer, the A$9.43 per share bid remains.

According to Origin, there is now the addition of a potential opportunity for institutional shareholders to re-invest into the Brookfield-owned energy markets business after completion of the scheme.

Also, in the event that the scheme is not approved by the requisite majorities, there is an alternative transaction option, consisting of a sale of energy markets to Brookfield for A$12.3 billion, with a subsequent off market takeover offer by EIG for Origin, subject to a 50.1 percent minimum acceptance condition.

In the event the alternative transaction proceeds, it is proposed that shareholders would receive total cash consideration of up to about $9.082 per Origin share.

The revised offer came just one day ahead of a meeting of Origin shareholders to vote on the scheme.

To allow time to consider the revised proposal and other relevant matters, Origin has determined to adjourn today’s scheme meeting to December 4, it said.

AustralianSuper, which has about 17 percent of shares in Origin, previously rejected the original offer and said it would vote against it.

The firm said in a statement on Thursday that it “will reject the last-minute attempts by the Brookfield and EIG-backed consortium to buy more time in its efforts to acquire Origin.”

AustralianSuper would be voting against the revised proposal for Origin and said this latest “low-ball offer strengthens AustralianSuper’s view that the offer remains substantially below our estimate of Origin’s long-term value.”

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