‘No choice’: Origin deal faces mounting opposition
VanEck has lent its voice to institutional investor resistance to Origin Energy’s $18.7 billion takeover offer from Brookfield and EIG Partners, declaring it will reject the deal unless it is increased amid mounting opposition.
Portfolio manager Jamie Hannah said that with Origin shares trading well above the bid price, it is in no shareholder’s interest to sell, leaving the North American suitors with no option but to consider increasing their offer if they want the transaction to succeed.
Origin CEO Frank Calabria at the AGM in Sydney on Wednesday. Oscar Colman
“In all honesty. I don’t think they have a choice now,” said Mr Hannah, whose firm is the 23rd biggest shareholder in Origin.
“It was a great price when it was first offered – it was a big premium, everyone was very happy with it – but now the market is trading above it, and the market expects it, we expect it.”
Origin shares have held above the offer price since the bid was cleared by the competition regulator last week, leaving about a 40¢ gap between the share price and the offer of about $8.81 a share. The shares were unchanged at $9.22 just before midday on Friday.
“We’re not going to sell for $8.81 when it’s trading at $9.20,” Mr Hannah said.
The takeover agreement, first revealed in November last year, was initially greeted very warmly by shareholders and hailed as the “deal of the year” in 2022. But Origin has since upgraded profit guidance for its energy markets business several times, while stronger commodity prices have boosted the value of its Australia Pacific LNG business in Queensland. Origin CEO Frank Calabria announced another marginal upgrade in guidance at the annual shareholder meeting in Sydney on Wednesday.
Origin’s 20 per cent-owned
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