The Origin Energy takeover explained


Here's the latest news on the bid to buy Australia's largest energy producer.

It's the sharemarket saga with more plot twists than an Indiana Jones movie, but the takeover bid for Origin Energy is no Hollywood blockbuster. The end result could impact the wealth of millions of Australians.

Here's what you need to know.

origin energy takeover bid australiansuper

What does the Origin takeover bid involve?

To recap, a year ago Origin Energy announced an $18 billion takeover bid from a consortium led by Canada's Brookfield Asset Management.

At that point, the deal was offering $9 per share, a 55% gain on the (then) $5.81 trading value of Origin stocks.

The Origin Board was all for the takeover, "unanimously" recommending that shareholders vote in favour of the deal.

Understandably, the prospect of pocketing a tidy capital gain has fueled investor interest, driving Origin shares to near-five-year highs since the bid was first announced.

So has Origin been sold?

Not yet.

Last week, just hours before shareholders were due to meet and vote on the proposed takeover, the Brookfield-led consortium revised its offer, upping its bid to $9.53 per share.

That's when things really heated up.

AustralianSuper announced it would vote against the takeover. Origin's shares were briefly placed in a trading halt, and the shareholder meeting was canned, with Origin Energy's Chair Scott Perkins noting "significant reservations" about the new deal.

What has a super fund got to do with all this?

AustralianSuper is not just Australia's biggest super fund with over 3.2 million members. It is also Origin Energy's largest shareholder.

In fact, AustralianSuper boosted its stake in Origin in early November 2023, lifting its ownership to over 17%, making it even harder for the consortium to get the 75% shareholder approval needed for the takeover to go ahead.

Why is AustralianSuper against the takeover?

AustralianSuper has not minced its words.

The fund claims the takeover offer is "substantially" below its estimate of Origin's long-term value, and has publicly stated that the company is better in the hands of AustralianSuper members and other shareholders "than a private equity consortium planning to shortchange them."

Where to from here?

The matter is far from over.

Origin Energy has set a new date of December 4 for shareholders to vote on the takeover bid.

It's doubtful that the sale will go ahead.

According to Scott Perkins, the proxy votes received prior to the cancelled shareholder meeting suggested insufficient 'yes' votes to meet the 75% benchmark.

Undoubtedly some shareholders will be keen to take the money from an Origin sale.

However, the whole exercise does raise questions about whether Australia's largest power generator, with a 24% stake of the national electricity market, should end up in foreign hands.

We'll know if it will happen on December 4.

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A former Chartered Accountant, Nicola Field has been a regular contributor to Money for 20 years, and writes on personal finance issues for some of Australia's largest financial institutions. She is the author of Investing in Your Child's Future and Baby or Bust, and has collaborated with Paul Clitheroe on a variety of projects including radio scripts, newspaper columns, and several books.
Brett Sambrook
December 28, 2023 11.59am

Australian super should pull its head in. What a joke.