It’s a no-deal for the ASX-listed Origin Energy Limited (AU:ORG) as its shareholders rejected the AU$19.1 billion takeover offer led by asset manager Brookfield Corporation (NYSE:BN). According to the company’s filings, 68.92% of shareholders supported the deal, which was below the minimum requirement of 75% for the takeover to move forward.
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Origin Investors Turn Down Brookfield’s Offer
Investors contended that Brookfield’s acquisition was undervaluing the company, pointing to Origin’s growing profitability and financial capability to undertake its energy transition as an independent entity.
Origin Energy’s share price traded down by around 4% today before the trading was temporarily suspended. Ahead of the voting results, the stock experienced a 3% decline during early trading hours, reflecting anticipation of a potential rejection.
Origin Energy is the largest energy retailer in Australia, serving around 4 million customers. The company supplies electricity, natural gas, LPG, and solar energy under its portfolio.
The End of the 13-Month Saga
This marks the second rejection within a two-month period, ending a 13-month-long saga.
The consortium led by Brookfield, along with EIG Global Energy Partners, initiated discussions with Origin Energy in November 2022, proposing a deal worth AU$18.4 billion, or AU$9.0 per share. Subsequently, in February 2023, the consortium made another bid, reducing the offer value to AU$18.2 billion, or AU$8.9 per share. However, this revised offer failed to garner shareholder approval. In response, the consortium increased its offer to AU$19.1 billion, equivalent to AU$9.39 per share.
The market anticipated that the deal would fall out after Origin’s primary shareholder, AustralianSuper, declared its intention to reject the offer of AU$9.39 per share. AustralianSuper holds approximately 17% of Origin, which was sufficient to obstruct the bid.
Prior to these results, there were reports that Brookfield would not come back with a revised offer for Origin and intends to assess the adverse impact of the government’s green energy policy on the company.
Is Origin Energy a Good Investment?
According to TipRanks, ORG stock has received a Moderate Buy consensus rating, backed by two Buy and two Hold recommendations. The Origin Energy share price prediction is AU$9.24, which represents a growth of 17.5% from the current price level.
It is important to note that these ratings may undergo changes in light of the latest developments on the deal.
