Brookfield to push ahead with $10.6bn bid for Octopus Energy shareholder
A Brookfield-led consortium has accused Origin Energy’s largest shareholder, Australiansuper, of “holding the company hostage” after it rejected a sweetened “best and final” A$16.4 billion ($10.55bn) takeover offer for Australia’s biggest energy retailer.
If a shareholder vote fails as a result, Brookfield has also offered a back-up plan of an off-market takeover bid that would require the minimum acceptance of 50.1 per cent of the register, giving it control of the Origin’s board and business plan even if the nation’s largest pension plan refuses to accept the offer.
Australiansuper said on Thursday the consortium’s A$9.53 per share offer, an eight per cent increase over the previous A$8.81 apiece bid, remained “substantially below” its estimate of Origin’s long-term value.
“They are holding the company hostage, they are standing in the way of other people getting a big cash payment and not having to invest in the (energy) transition going forward,” Luke Edwards, head of Brookfield’s renewable power and transition for Australia, told news agency Reuters in an interview.
“Brookfield is not a bottomless pit of money, we are a financial institution, we have a fiduciary duty to our investors to be good stewards of that capital and allocate that capital appropriately.”
Edwards said Brookfield would push on with a shareholder vote on 23 November and urge other investors to back the offer rejected by AustralianSuper, which has a 13.68 per cent stake that could scupper a deal requiring 75 per cent approval depending on the turnout.
Australiansuper, however, has argued the bid undervalues Origin’s ability to profit from the transition, in particular because of its customer base and stakes in renewable energy player Octopus and the Australia Pacific LNG project.
The rejection put Australiansuper at odds with Origin’s board, which said on Thursday it unanimously recommended the deal barring a stronger rival bid.
Should the deal close, the consortium will divide up Origin, with Brookfield and its partners GIC and Temasek taking the power generation and retailing business.
Australiansuper, which said it believed Origin had a highly strategic portfolio of assets that would benefit from an energy transition to renewable power, declined to comment further.
Reuters – Scott Murdoch and Lewis Jackson