The Origin Energy takeover saga continues with the company declining a revised acquisition proposal from Brookfield Renewable Partners. The board labelled the new Brookfield offer as "incomplete and complex," and recommended investors support the initial A$18.7 billion bid when it is put to a vote on Monday.
Originally slated for November 23, the shareholder vote was delayed due to the revised bid from Brookfield and a consortium including US-based EIG Global Energy Partners. The board deferred the decision to evaluate Brookfield's revised proposal, which suggested an alternative transaction if the primary bid didn't materialise.
Upon review, Origin’s board found the revised bid laden with conditions, lacking in definitive funding plans, regulatory approvals and necessary legal documents.
The board, advised by experts, concluded that the proposal failed to align with the best interests of Origin or its shareholders, citing insufficient value and extended timelines.
The alternative plan involved a mixed payout in Australian and US dollars, alongside dividends and capital returns, pending tax office approval. If Monday's vote doesn’t reach the required 75% approval, Origin intends to continue its strategic focus on leading Australia's energy transition.
Key shareholders hold diverse views. AustralianSuper, holding more than 17% of Origin's shares, opposes the takeover, while entities like Allan Gray and the Australian Retirement Trust support it. The postponed vote gives Brookfield additional time to persuade uncertain investors.
The current Brookfield offer stands at A$9.39 per share, inclusive of a fully franked special dividend.
Former Prime Minister Paul Keating criticised the takeover as a short-term profit scheme. He urged the Foreign Investment Review Board to reject the bid, paralleling Canada's blockage of BHP (ASX:BHP)'s bid for Potash Corporation.
Keating, an adviser to Lazard Australia, representing AustralianSuper, highlighted concerns about Brookfield's approach to asset management.
In defence, a Brookfield spokesperson asserted that their acquisition would expedite Origin's renewable energy shift, outlining a 10-year investment plan, investing up to A$30 billion.
If Brookfield's current proposal fails, the consortium might consider a direct, unsolicited bid for Origin Energy.