AustralianSuper should lob rival bid for Origin or walk away, EIG boss says
The boss of EIG, which is trying to take over Origin Energy with Brookfield, says AustralianSuper should launch a counter bid for the energy major or move on.
A takeover suitor for Origin Energy has lashed out at the power giant’s biggest shareholder, telling AustralianSuper to either lob a rival $20bn-plus bid or walk away.
The challenge from EIG Partners chief executive Blair Thomas to AustralianSuper marks an escalation of the campaign from the LNG giant and its partner Brookfield to secure enough shareholder support for its $9.53 a share offer for Origin.
The contest is razor close, with Origin’s largest shareholder – AustralianSuper declaring it has now increased its stake to just over 15 per cent, and it intends to vote against the deal – prompting a challenge from Mr Thomas.
“If someone wants to argue with us on value, they should do so with facts and data, and I haven’t seen that. Hyperbole only gets you so far. So start with facts and data And in the absence of that, make your own damn offer. We’ve put $20bn on the table and if somebody thinks that offer is so egregious,” Mr Thomas told The Australian after arriving in Australia on a short notice trip to shore-up support from Origin shareholders.
“Where’s their bid? Show up and make your own bid. The fact that they don’t do that, I think, tells you something.”
Mr Thomas said the consortium’s revised bid has been well received, but the duo is working on alternative plans should it be unsuccessful in the vote on November 23.
Brookfield and EIG last week lifted their offer by 69 cents per share, worth an extra $1.2bn. It marks a 70 per cent premium to where shares in Origin Energy were trading when the initial bid was submitted in November 2022.
AustralianSuper, however, continues to insist the offer is too low.
“The offer from the consortium remains substantially below our estimate of Origin’s long-term value,” a spokesman for AustralianSuper said, as the superannuation giant confirmed it has increased its stake in Origin by more than 1 per cent.
The diametrically opposed views have seen Origin’s share price tumble as investors weigh the prospect that Brookfield and EIG are unable to secure enough shareholder support, which Mr Thomas blamed on AustralianSuper.
“Through their public statements, they’ve driven down the share price by over $1. And then they’re buying. The only reason the stock hasn’t fallen further is because of their bid. For the shareholders that are selling today, they have just had $1 taken out of their pocket. $1 in this transaction is $2bn.”
Shares in Origin rose 1.4 per cent to $8.50 on Monday afternoon, recouping some of the losses from last week.
If the consortium’s bid fails at the shareholder vote, they could return with an off-market bid, which would see one of the duo buy Origin and then sell a division to the partner.
But industry sources have said AustralianSuper believes EIG and Brookfield would be keen to avoid such a scenario, as it proves too difficult and not as financially appealing.
But Mr Thomas said such assumptions are incorrect and if AustralianSuper is angling for such an outcome, it would be counter-productive.
“If that is the determination, then I would question whether the same lack of work that went into the value determination has gone into this assumption,” said Mr Thomas.
“If we elect to go this route. We would acquire the 51 per cent share, and we would have the same onsell arrangement for the energy markets business and what is left is a public company that owns APLNG, and we are the controlling shareholder.”
Mr Thomas said such a deal would be easily financed due to APLNG – one of Australia’s largest LNG exporters – existing supply contracts, and AustralianSuper – which has insisted it will not be pressured into selling – would be a minority shareholder in a gas business.
AustralianSuper has said it opposes the sale of Origin due to the opportunities it sees for the business in Australia’s energy transition.
A spokesman for AustralianSuper declined to comment on Mr Thomas’ comments.
Brookfield and EIG have won favour with Australian officials for their bid, as they promise to invest $20bn-$30bn to accelerate the nation’s transition away from fossil fuels.
Brookfield has said it will develop 14GW of renewable energy generation assets, higher than the 5GW that Origin has currently proposed.
The promise is attractive for Australia as it struggles to deliver its ambitious plan of having renewable sources generate more than 80 per cent of the nation’s electricity by 2030.
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