Origin takeover price needs boost towards $10 per share: Macquarie
The bid price for Origin Energy from its North American suitors needs to be boosted towards $10 a share or higher to reflect the big lift in the takeover target’s business since it was agreed, Macquarie has told clients.
A price for Origin of between $9.49 and $10.08 a share is now justified, the investment bank’s analyst, Ian Myles, said in a finding that will add fuel to the simmering debate around the value of the offer. That price is as much as 14 per cent higher than a bid from Brookfield and EIG Partners of about $8.85.
Origin Energy CEO Frank Calabria has overseen a brightening outlook for the electricity and gas supplier. Dominic Lorrimer
The note comes after fund manager Perpetual became the first material Origin shareholder to go public on its lobbying of Origin’s board and management to push the company’s suitors for a better deal than their offer, which values the company at $18.7 billion, including debt.
Perpetual’s Australian equities head, Vince Pezzullo, cited several factors behind the firm’s view, including the extension of the Eraring coal power station in NSW, the faster-than-expected growth at partly owned Octopus Energy in the United Kingdom, and the value of its stake in its highly cash-generating Australia Pacific LNG venture in Queensland, which could be used to fund investment in the energy transition.
Speaking after Origin posted a bigger-than-expected 83.5 per cent surge in profit for the 12 months to June 30, Kingfisher Capital Partners, a smaller investor, also said the improved earnings were starting to make the $8.91-a-share takeover bid from Brookfield and EIG look out of date.
Origin chief executive Frank Calabria said at the time that the issue of the bid value was “a matter for
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