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Australia’s Origin Energy Ltd. OGFGF said on Thursday it had received a sweetened takeover bid from a Brookfield Corp. consortium, valuing the power producer at 16.40-billion Australian dollars ($14.6-billion), days after its top shareholder rejected the previous offer.

The consortium led by Canada’s Brookfield BN-T, which also includes EIC’s MidOcean Energy, is now offering Origin shareholders 9.53 Australian dollars a share, up 8.2 per cent from the prior offer of 8.81 Australian dollars apiece, and a 5.1-per-cent premium to its last closing price.

The consortium said the increased offer was its “best and final” proposal meaning it cannot be increased unless a rival offer emerged.

“The fact that no competing offer has surfaced in nearly a year, together with the massive premium in our proposal, evidences the fact that we have identified every element of value available,” EIG CEO Blair Thomas said in a statement.

Top shareholder AustralianSuper on Tuesday had rejected the prior offer, saying it was “substantially below” its estimate of long-term value for Australia’s biggest energy retailer.

The deal requires 75-per-cent support from the votes cast at a shareholder meeting, scheduled for Nov. 23, meaning AustralianSuper’s holding in Origin – the biggest at 13.68 per cent – could be enough to scupper it if not all shareholders vote.

Australian regulator approves Brookfield’s US$9.8-billion bid for Origin Energy

AustralianSuper did not immediately respond to a request for comment.

Origin’s board said it unanimously recommended shareholders vote in favour of the revised deal in the absence of a superior proposal.

The bid is made up of two currencies, including 6.59 Australian dollars and a U.S. dollar component of US$1.86 plus a fully franked special dividend of 39 Australian cents that Origin said its board intends to pay.

At 9.53 Australian dollars a share, the new offer is above the 8.45 to 9.48 Australian dollar-a-share valuation range contained in an independent expert’s report examining the previous offer.

However, the report also outlined a “roll forward” calculation that said Origin’s shares could be worth an additional 40 Australian cents by the time a potential takeover is due to occur. A recent report from Macquarie said the consortium bid should be closer to 10 Australian dollars a share.

Brookfield Asia Pacific chief executive officer Stewart Upson said the consortium planned to invest 20-billion Australian dollars to 30-billion Australian dollars in Origin in the next decade to fund the company’s energy transition to achieve net-zero emissions.

“With its current funding sources and as a public company, Origin will not to be able to match the level of investment at the scale and speed as it could achieve under Brookfield’s ownership,” he said.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 15/05/24 10:40am EDT.

SymbolName% changeLast
OGFGF
Origin Energy Ltd
+6.67%6.4
BN-T
Brookfield Corporation
-0.41%60.53

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