Origin’s Top Investor Lifts Stake After Rebuffing Brookfield

Print 🖨

Origin Energy Ltd.’s largest shareholder boosted its stake after declining further talks with private equity firms Brookfield Asset Management and EIG Global Energy Partners over a A$19.4 billion ($12.6 billion) takeover plan.

AustralianSuper lifted its ownership in the Australian utility to 15.03% and said it was not in discussions about joining the proposed buyout’s consortium, according to a statement on Monday, confirming an earlier Bloomberg News report. The A$300 billion pension fund had maintained it had no interest in participating in the take-private as a co-investor even after the Brookfield-led consortium had rushed to open a dialogue, people familiar with the matter have said.

“AustralianSuper believes the ongoing energy transition, as we move towards net zero by 2050, has further enhanced the value of strategic energy transition platforms, such as Origin, whether public or private,” it said in the statement.

The failed overtures underline a deep frostiness in relations between the two megafunds, and set both sides up for a pitched and public campaign over the attempted takeover of Australia’s largest energy provider. Under Australian rules which require a minimum of 75% shareholder support when voting on a takeover offer, 15% opposition has usually proved sufficient to unravel a deal given not all retail investors always vote.

ROO.AI Oil and Gas Field Service Software

AustralianSuper should make its own takeover offer or back down, EIG Chief Executive Officer Blair Thomas said in an interview on Monday. In the absence of a deal, Origin will be forced to confront an expensive green transition that will require capital from diminished dividends, dilutive share offerings or expensive debt, he said.

For Brookfield, its backup options included weighing a seat for AustralianSuper as a member of the take private consortium, as well as resurrecting the transaction in new form as an off-market takeover offer, should a shareholder vote to approve it on Nov. 23 falter.

The Brookfield group had attempted to bring its yearlong pursuit to a head last week by raising its offer by about A$1.2 billion to a binding “best and final” bid.

But AustralianSuper — the country’s largest pension fund — swiftly deemed it “substantially below our estimate of Origin’s long-term value,” citing the target’s green ambitions as a compelling reason for a higher price.