Under the Midnight Spotlight: The Prolonged $20 Billion Showdown in the Origin Energy Takeover Saga

  • Business
  • Friday, 24 November 2023 01:07

"Origin Energy's $20 Billion Takeover Drama Takes a Late-Night Turn

In a surprising twist to the high-stakes $20 billion takeover battle, Origin Energy has thrown a curveball by delaying a crucial shareholder vote on Brookfield and EIG's proposed acquisition. The eleventh-hour move comes in response to a revised alternative proposal received by Origin, which, despite being deemed inferior by the company's board, has injected a new layer of complexity into the unfolding saga.

Over a tumultuous 24 hours of takeover drama commencing late on Wednesday, Origin Energy disclosed that the North American consortium's touted "best and final" offer of $9.43 per share was on the brink of failure, lacking the necessary approval from shareholders. Shareholders arriving for the scheduled Origin takeover vote were met with an unexpected adjournment, orchestrated in response to a late-night pitch from Brookfield and EIG.

The chairman, Scott Perkins, informed shareholders at Sydney's Swissôtel that the adjournment until Monday, December 4, would afford Origin the time needed to evaluate the alternative proposal. The company acknowledged that, based on proxy votes received, achieving the required 75 percent approval for the existing scheme was unlikely.

In the event of shareholder rejection next month, the alternative proposal from Brookfield and EIG involves a transaction where Brookfield would acquire Origin's energy markets business, including the European Octopus retailer, for $12.3 billion. Simultaneously, EIG would launch an off-market takeover bid to secure 50.1 percent control of Origin.

Chairman Perkins, while acknowledging the additional opportunity for shareholders to receive cash value under the alternative deal, emphasized that the board views the transaction as inferior to the existing scheme. Shareholders, under the alternative arrangement, stand to receive up to $9.08 per Origin share, a notable reduction from the current offer of $9.43."

"In conclusion, Origin Energy's $20 billion takeover saga has taken an unexpected turn with the postponement of a crucial shareholder vote in response to a last-minute alternative proposal from Brookfield and EIG. The 24-hour whirlwind of developments, beginning late on Wednesday, revealed uncertainties surrounding the North American consortium's "best and final" offer, prompting Origin to adjourn the scheme takeover vote until December 4.

The decision to delay the vote allows Origin the necessary time to assess the viability of the alternative proposal, although the company's board has already characterized it as inferior to the existing scheme. Chairman Scott Perkins conveyed to shareholders that the adjournment was a strategic move in light of the apparent challenges in securing the required 75 percent approval for the current deal.

Looking ahead, the alternative transaction, contingent upon shareholder rejection, outlines a scenario where Brookfield acquires Origin's energy markets business for $12.3 billion, while EIG launches a takeover bid to gain a majority stake. Despite presenting an additional opportunity for shareholders to receive cash value, the board emphasizes reservations about the alternative deal, as it offers shareholders up to $9.08 per Origin share, notably less than the current offer of $9.43.

As the complex takeover drama unfolds, the decision on December 4 will likely shape the trajectory of Origin Energy's future and determine the ultimate outcome of this high-stakes corporate battle."