Origin Energy fields $18b takeover bid from Brookfield

Origin Energy, one of the nation’s largest power and gas suppliers, has received an $18 billion takeover offer from a consortium led by Canadian asset management firm Brookfield.

The board of ASX-listed Origin told investors on Thursday morning it would open its books to the consortium of Brookfield and energy infrastructure investment giant EIG, and intended to recommend shareholders approve the $9-a-share cash offer, which represented nearly a 55 per cent premium to the stock’s last closing price.

“Due diligence is expected to complete within eight weeks,” Origin said in a statement on Thursday morning. “Should Origin receive any proposals which the board considers may lead to a superior outcome for Origin shareholders, these will be evaluated.”

Origin’s business spans electricity generation, power and gas retailing and a stake in a Queensland liquefied natural gas joint venture, Australia Pacific LNG. The company revealed the takeover offer had followed an earlier indicative bid from the consortium to acquire Origin for $7.95 per share on August 8. The bidders subsequently made another pitch at $8.70 to $8.90 a share, before Origin agreed to participate in talks that led to the $9-per-share bid.

“Our confidence in Origin’s prospects underscored our engagement with the consortium and delivered a material increase on their initial offer,” Origin chairman Scott Perkins said.

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Under the terms of the consortium’s offer, Brookfield would acquire Origin Energy’s domestic energy generation and retailing businesses, while MidOcean Energy – an LNG company formed and managed by EIG – would acquire Origin’s gas business, including its 27.5 per cent interest in Australia Pacific LNG (APLNG).

Brookfield said it would invest an additional $20 billion to fund Origin’s clean energy transition plan, including building more renewable energy.

Stewart Upson, Brookfield’s Asia Pacific chief executive, said the energy transition in Australia presented a “once-in-a-generation” investment opportunity.