Brookfield spruiks green agenda in push for Origin Energy shareholder support
Canadian private equity giant Brookfield is seeking to sway Origin Energy shareholders with pledges to spend significant sums in creating renewable energy and storage.
As Origin Energy investors weigh the prospect of AustralianSuper attempting to block a takeover deal, Canadian private equity giant Brookfield is also seeking to sway shareholders with its green pledges, in marketing seen by The Australian.
Brookfield has promised to spend between $20bn-$30bn on creating 14GW of new renewable energy generation and storage.
The promise is an attractive one for Australia as it struggles to deliver on its ambitious plan of having renewable sources generate more than 80 per cent of the nation’s electricity by 2030.
The rapid transition away from coal is the centrepiece of the federal government’s plan to slash emissions by 43 per cent by the end of the decade.
“It will result in a substantial acceleration of Origin Energy Markets’ renewable generation development, making a significant contribution to achieving Australia’s net zero targets,” Brookfield says.
Brookfield has also sought to demonstrate its transparency to the target, highlighting pledges to publish annual renewables development targets, and annual emissions reduction and intensity targets within four months of completing the transaction.
Brookfield’s annual progress report explained how the 14GW build-out was a condition imposed by the Australian Consumer and Competition Commission when it gave the consortium’s bid the green light, despite acknowledging it had some competition concerns.
The use of the climate goals marks a full press campaign by Brookfield to sway Origin’s shareholders.
The vote is expected to be close, with retail shareholders – which account for some 30 per cent of the equity holders – expected to be critical.
Origin is leading efforts to engage with individual shareholders, and efforts have scored recent success with recommendations from several proxy advisers to support the transaction.
Brookfield and EIG have seized on the recommendations as evidence that it has momentum for its bid, but, critically, notable institutional investors have yet to reveal their voting intentions.
If the consortium’s bid fails at the shareholder vote, it could return with an off-market bid, which would result in EIG buying Origin and then selling a division to Brookfield.
Industry sources have, however, questioned the possibility of EIG securing the capital needed to fund the transaction.
Origin shares closed down 22c at $8.65 on Friday, valuing the company at $14.9bn. The stock hit a year high of $9.32 on October 16.
Ownership Matters on Friday became the latest proxy adviser to recommend shareholders in Origin Energy vote in favour of the $20bn bid. Glass Lewis and Institutional Shareholder Services have also given it the nod.
“We continue to receive supportive feedback and positive momentum towards the Scheme vote is building,” a spokesman for the consortium said last week. “The overwhelming independent advice is for Origin investors to accept our best and final price of $9.53.”
But AustralianSuper – with a 15 per cent stake in Origin – has vowed to oppose the deal, saying it undervalues Origin.
More Coverage
Government must focus on serious productivity growth
How does a nation as rich in minerals, energy and skills as Australia lose its standing as a global resources hotspot?
Federal Labor on a collision course with miners over green push
The federal government has made a powerful enemy for itself in the west after the Chamber of Minerals and Energy WA said it would fight Labor’s push for so-called nature-positive laws.