Brookfield-EIG takeover of Australia's Origin defeated

Market: Coal, Electricity, Natural gas
04/12/23

A private equity takeover of Australia's Origin Energy has been defeated, with only 69pc of shareholders' votes backing a A$20bn ($13bn) buyout of the gas and electricity firm by a consortium of Canada-based asset management firm Brookfield and US energy investment firm EIG.

Support for the Brookfield-EIG offer was below the 75pc minimum required, mainly because its 17pc shareholder domestic pension fund AustralianSuper rejected the takeover as a "low-ball offer", despite the consortium upping its takeover price last month.

"We have never wavered in our belief that the value and future value of Origin is better in the hands of members and other shareholders, rather than a private equity consortium seeking to make a quick return based on the proposed scheme terms and we are pleased that this is the outcome," AustralianSuper said following the vote on 4 December.

Origin first agreed to Brookfield-EIG's takeover bid in March this year, with the Australian Competition and Consumer Commission approving it last month.

Brookfield had promised to build up to 14GW of new renewable power generation and storage facilities by 2033 by spending between A$20bn-30bn.

"While the scheme will not proceed, it was supported by many Origin shareholders," said Origin chairman Scott Perkins. "Importantly, this process has made clear the confidence all shareholders have in Origin's business, assets and people and its strategic positioning for the energy transition."

If approved, the scheme would have resulted in Origin splitting into two businesses, an integrated gas business to be owned by EIG-managed LNG firm MidOcean Energy and an energy market business to be controlled by Brookfield.

Origin is the upstream operator of the 9mn t/yr Australia Pacific LNG at Queensland's Gladstone with a 27.5pc stake. Downstream operator ConocoPhillips with 47.5pc and China's state-controlled Sinopec with 25pc own the remainder.

Origin owns about 13pc of the National Electricity Market's power generation capacity, including Australia's single largest power plant, the 2,880MW coal-fired Eraring in New South Wales.

By Tom Major

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