Origin valuation arms investors for fight on bid price
An independent assessment of Origin Energy’s $18.7 billion takeover offer from two North American suitors has beefed up shareholders’ leverage to argue for a higher offer, despite it being deemed fair and reasonable.
The expert, Grant Samuel, valued Origin shares at between $8.45 and $9.48, a range that covers the offer price of about $8.81 a share from Toronto-based Brookfield and Washington-based EIG.
But in an unusual move, Grant Samuel noted that by the time the takeover is due to take effect, Origin shares could be worth 40¢ more. That would leave the offer price below the bottom end of the valuation range.
Origin chairman Scott Perkins addresses the annual shareholder meeting in Sydney on Wednesday. Oscar Colman
The higher, “roll forward” valuation plays into the hands of Origin investors including its biggest shareholder, AustralianSuper, and others such as Perpetual that have signalled they regard the offer price as too low given the improved outlook for Origin’s business.
The Origin board has already agreed to the offer price, subject to the independent expert’s valuation and no higher offer emerging, leaving Origin shareholders in the box set to press for more.
Origin’s traded share price already reflects pressure on Brookfield and EIG to consider sweetening their offer.
The price of Origin shares last week surged above the offer price for the first time after the merger received approval from the competition regulator, and they have largely held their ground.
Shares in Origin, which closed on Wednesday at $9.21, edged up as much as 2¢ in early trading to $9.23.
In documentation released on Thursday, Origin chairman Scott Perkins noted the 40¢ gap between the traded price and the offer price, and reiterated
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