‘Reasonable’: Origin takeover gets support from proxy adviser
Origin Energy’s North American suitors have secured support for their $20 billion takeover proposal from key proxy adviser Institutional Shareholder Services, which has told investors the deal offers a “reasonable” premium.
“The transaction offers shareholders a cash exit at a premium in exchange for surrendering the payoff of a potential successful energy transition for the company,” ISS said in a report ahead of the critical vote by Origin shareholders on November 23.
EIG CEO Blair Thomas in Sydney. Louie Douvis
While Origin has a strong market position and potential funding to finance the transition, the volatility in energy prices, regulatory uncertainty and execution risks around projects make the payout “rather uncertain”, it said.
The recommendation to vote for the transaction comes amid doubts the mega-deal to take Australia’s biggest listed electricity and gas supplier private will win the 75 per cent support it needs from Origin shareholders because the biggest investor on the register, AustralianSuper, has resolved to oppose it.
Industry fund AusSuper last week increased its stake in Origin to just over 15 per cent, meaning bidders Brookfield and EIG need a particularly high turnout from Origin shareholders and an overwhelmingly positive outcome at the polls to avoid a collapse in the deal, which has been 16 months in the making.
Longstanding shareholderAllan Gray has said it will accept the offer in the absence of a higher one, while VanEck has said it will seriously consider it. Canada’s Brookfield and US-based EIG increased their bid by 8 per cent to $9.53 a share last week.
Origin’s shares, which sank last week amid fading expectations the transaction will go ahead, built on Monday’s gains in early trading
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