Brookfield and EIG’s $20 billion takeover bid for Origin Energy has been defeated after failing to receive the necessary support from shareholders for the deal to proceed.
At a scheme meeting held in Sydney on Monday, 68.92 per cent of votes cast by Origin shareholders were in favour of the takeover, below the required threshold of 75 per cent.
Monday’s vote represents a victory for AustralianSuper, Origin’s single largest shareholder with a stake of more than 17 per cent and the biggest opponent of the takeover.
AustralianSuper has repeatedly argued that Brookfield and EIG’s offer is “substantially below” the $300 billion superannuation fund’s estimate of Origin’s long-term value.
In a statement on Monday, an AustralianSuper spokesperson welcomed the decision by Origin shareholders to vote against the takeover scheme.
“AustralianSuper believes Origin has a highly strategic portfolio of assets to participate in, and for members to benefit from, the energy transition,” the spokesperson said.
“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.”
The vote on the takeover offer had originally been scheduled to take place on 23 November. However, Brookfield and EIG submitted a revised proposal less than 24 hours prior to this meeting taking place, resulting in the vote being postponed.
This proposal included a potential alternative transaction involving the sale of Origin’s energy markets business to Brookfield, subject to approval by at least 50 per cent of shareholders, and a concurrent takeover bid by EIG for the shares in Origin.
AustralianSuper dismissed the revised proposal as a “low-ball offer” and a last-minute attempt by Brookfield and EIG to buy more time. The Origin board also concluded that the revised proposal was not in the best interests of the company or its shareholders and unanimously recommended that shareholders vote in favour of the original scheme.
In an ASX statement on Monday, Origin chairman Scott Perkins noted that shareholders had turned out in significant numbers to have their say on Origin’s future.
“While the scheme will not proceed, it was supported by many Origin shareholders. 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,” he said.
“We look forward to the continuing support of our shareholders as we focus on delivering on our strategic priorities, accelerating investment in cleaner energy and storage and pursuing our ambition to lead the energy transition.”
AustralianSuper said it is looking forward to working with Origin’s board and executive team to execute their strategy and ambition to lead Australia’s energy transition.
“AustralianSuper is a long-term investor in the Australian economy and is open to providing capital to assist Origin as it prepares to transition over the coming decades, while delivering on our purpose to help members achieve their best financial position in retirement,” the AustralianSuper spokesperson added.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.