Australian energy firm and APLNG shareholder, Origin, has rejected a revised takeover offer from a consortium consisting of Canada’s Brookfield Asset Management and a unit of US-based energy investor EIG.
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.
Origin announced in a statement last week that it has received a non-binding and indicative proposal from the consortium to amend the current scheme.
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 decided to adjourn the scheme meeting to December 4.
“The revised proposal is incomplete and highly conditional, including requiring finalization of funding arrangements, updates to regulatory approvals, rulings from the Australian Taxation Office, and entry into revised legal documentation,” Origin said in a statement on Thursday.
Following careful consideration, including obtaining advice from its advisers, Origin’s board considers the revised proposal “is not in the best interests of Origin or its shareholders,” it said.
The revised proposal is “incomplete, complex, highly conditional, and does not provide sufficient certainty for Origin shareholders,” the firm said.
“It is also the board’s view that the value of the revised proposal does not adequately compensate shareholders, including taking into account the extended timeline that the revised proposal would require,” Origin said.
Further, it would require Origin to accept “continuing constraints on the business following an already lengthy period for the current scheme,” the firm said.
Origin said that the scheme meeting at which shareholders will vote on the proposed scheme will proceed as planned on December 4.
If the current scheme is not approved by the requisite majorities at the meeting on December 4, Origin’s board and management “will continue to execute on Origin’s strategy and ambition to lead the energy transition in Australia,” it said.
“Consistent with its duties, the board will remain open to strategic options that enhance shareholder value,” the firm said.