Origin Energy shares dive as deal risks mount
Market confidence in the $20 billion takeover deal for Origin Energy has taken a dive after rebel shareholder AustralianSuper further increased its stake in the large electricity and gas supplier, cutting the chances of bidders Brookfield and EIG securing the investor support they need.
Origin shares dropped 3.2 per cent on Tuesday to $8.50 after AusSuper bought more stock, taking its holding to 16.5 per cent and making it even more difficult for the North American pair to get the required 75 per cent shareholder approval at next week’s vote.
Origin Energy chairman Scott Perkins has urged shareholders to support the scheme of arrangement. Oscar Colman
But the decline in the shares since mid-October when they were trading at north of $9.25 has helped persuade some investors to drop their earlier opposition, keeping the possibility alive that Brookfield and EIG may still secure the 75 per cent shareholder approval that they need.
The bidders increased their offer by 8 per cent two weeks ago, and this week declared a fully franked special dividend if the deal is approved. The shares closed on Tuesday some 10.8 per cent below the sweetened bid price.
“The revised proposal is not quite what we want, but I guess we are getting a taste of the share price trading materially below what’s proposed, so we’ve got a taste of the downside,” said Ross Illingworth at Kingfisher Capital Partners, who had previously resolved to reject the offer.
“We’ve probably changed our position a bit, thinking through it, and I think there would be quite a few others in that camp as well.
“We’re probably now inclined to vote for it.”
Still, AustralianSuper is understood to have fielded multiple calls from other Origin shareholders looking to
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