This Octopus is making Origin Energy harder to swallow

afr.com:

London | There are plenty of tentacles in the $18.7 billion Brookfield-EIG takeover bid for Origin Energy, but there is only one Octopus.

Origin first bought a 20 per cent slice of the British energy conglomerate in May 2020, and has piled in $700 million-plus altogether. But at no point, one suspects, did Origin imagine it was creating what now feels a bit like a poison pill for any takeover bid.

CEO-founder Greg Jackson says Octopus Energy is a bit like Amazon. Domenico Pugliese

The vertiginous growth of Octopus, from cheeky startup in 2015 to Britain’s second-largest energy retailer in 2023, has turned Origin’s stake into a chunky asset – one that has to be factored into its share price.

And as investors like AustralianSuper weigh up the Brookfield-EIG bid, they arguably need to look not just at the value of the Octopus stake today – inasmuch as they can figure it out – but also the growth potential.

Octopus sells energy to households and business, it leases electric vehicles, it installs EV charging infrastructure, and it invests billions into renewable energy. But it has also developed a tech platform, Kraken, that both fits the emerging renewable-energy world and can also be licensed to utility providers beyond the energy sector.

Company founder Greg Jackson told me back in May 2020 that Octopus wants to be “the Amazon of global energy retailing”. For starters, Kraken is expected to eventually underpin half the household electricity accounts in Britain. Now, Octopus has also started selling the platform to water and broadband companies.

Octopus is privately and tightly held. For the time being, owning Origin is the only way to get exposure. So the question for Origin shareholders is: if they sell to Brookfield and