Australia’s largest pension fights off $10bn bid for Origin: ‘below our estimate’
AustralianSuper has again rejected an unsolicited offer from an investment consortium led by Canadian asset manager Brookfield and EIG to snap up Origin Energy for roughly $10.5 billion, less than a week before the electricity giant is holding its next shareholder meeting in Sydney.
Earlier this month, Australia’s largest pension fund, which holds a 16.5% stake in the energy firm, made it clear it will not support any Brookfield-led takeover push, and does not plan to join the consortium as a partner.
“Our position remains unchanged,” a spokesperson told Net Zero Investor.
“We are not in discussions about the possibility of joining the Brookfield and EIG-backed consortium."
AustralianSuper strongly believes the long-term value of the ASX listed public company is likely to swell due to climate transition expectations in Australia.
“We believe the offer remains substantially below our estimate of Origin’s long-term value,” the spokesperson stressed, adding that “the ongoing energy transition, as we move towards net zero by 2050, has further enhanced the value of strategic energy transition platforms such as Origin, whether public or private.”
He added: “AustralianSuper is a long-term shareholder in Origin and our investment process is built around determining the long-term intrinsic value of the companies we invest in."
Headquartered in Sydney, Origin Energy is a major integrated electricity generator, and electricity and natural gas retailer.
It operates Eraring Power Station, Australia’s largest coal-fired power station, in New South Wales, which it plans to close within the next two years.
When approached by Net Zero Investor, Anneliis Allen, a spokeswoman for Origin Energy, told Net Zero Investor "we don’t have a comment on [the Brookfield offer], because Origin has no involvement in that process."
She added: "It is direct engagement from the consortium with AustralianSuper. It is currently before Origin shareholders, and our focus is on encouraging shareholders to have their say on the proposed acquisition of the company ahead of the meeting next Thursday 23 November."
AustralianSuper stressed it will continue to reject the ‘unsolicited offer’ at next week's meeting.
Only last week, the pension giant, which has around AUS$300 billion in assets under management, confirmed it had increased its stake in Origin to 15.03%, making it the company’s largest shareholder.
Moreover, according to the latest public filing, dated 14 November, AustralianSuper has further raised its shareholding to 16.5%.
However, it is important to note the fund does not own a quarter or more, the threshold required to block any bid.
‘Best and final’
The latest rejection by AustralianSuper comes only weeks after it rejected an already improved ‘best and final’ offer of AUS$9.53 per share offer from the investment consortium.
Brookfield’s offer comes with investment commitments of up to A$30 billion, which should help Origin to decarbonise much faster than if the company remained public, according to Luke Edwards, the firm’s managing director of renewable power & transition.
"We’re offering a clear pathway to a faster reduction of the company’s emissions and an acceleration of Australia’s net zero targets," Edwards said.
AustralianSuper's spokesperson did not respond to Brookfield's statement but indicated energy assets are very much on the pension's radar.
“We will always look at opportunities to invest in compelling long-term energy transition opportunities that deliver for members,” he concluded.