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$11-Billion Takeover Bid for Australia’s Top Utility Collapses

Not enough shareholders of Australia’s top energy retailer, Origin Energy, backed on Monday a takeover bid from a Brookfield-led consortium of investors, leading to a collapse of a proposed $11-billion deal.

A total of 68.92% of the votes cast by Origin Energy’s shareholders were in favor of the bid, short of the required 75% majority necessary to approve the proposal and move the deal forward, the Australian company said today.

A consortium led by Brookfield and EIG has proposed to acquire Origin Energy Limited and its best and final proposal of AUS $9.53 per share significantly raised the cash consideration, Origin Energy said last month.

Origin Energy’s shareholders were expected to vote on the proposal on November 23, but Origin Energy adjourned the vote to December 4, after receiving on the evening of November 22 a non-binding and indicative proposal from the Brookfield-led consortium of investors and EIG to amend the current Revised Proposal.

The top shareholder in Origin Energy, pension fund AustralianSuper with a stake of more than 17%, has said that it would vote against the proposed terms of the acquisition.

“This latest low-ball offer strengthens AustralianSuper’s view that the offer remains substantially below our estimate of Origin’s long-term value,” AustralianSuper said in a statement last month.

“AustralianSuper is resolute the value and future value of Origin is better in the hands of AustralianSuper members and other shareholders than a private equity consortium planning to shortchange them."

Blair Thomas, CEO of EIG, told Reuters in an interview in November that the consortium was done talking to AustralianSuper. 

Commenting on Monday’s vote that failed to win 75% of shareholder support, Origin Energy’s chairman Scott Perkins said “We look forward to the continuing support of our shareholders as we focus on delivering on our strategic priorities, accelerating investment in cleaner energy and storage and pursuing our ambition to lead the energy transition.”

AustralianSuper, for its part, said on Monday, as carried by The Wall Street Journal, “We have never wavered in our belief that the value and future value of Origin is better in the hands of members and other shareholders rather than a private-equity consortium seeking to make a quick return.”

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By Tsvetana Paraskova for Oilprice.com

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