AustralianSuper rejects peace offering, further complicating ASX Origin takeover

AustralianSuper said its position, previously made public, is unchanged on the upcoming vote as it believes the offer remains substantially below its estimate of Origin’s long-term value. The fund won’t reveal its own valuation but market speculation puts it around $12 a share.

The suitors need 75 per cent of votes cast at the meeting to back their bid for it to succeed, and a strong turnout from nearly all shareholders is crucial. Typically, about 60 per cent of shareholders vote or appoint proxies at scheme meetings and under that scenario AustralianSuper’s 15 per cent stake will knock out the takeover as it would represent 25 per cent of the shares cast.

Under the deal’s terms, Brookfield will gain control of Origin’s power generation and retailing division, which supplies about 4.5 million customer accounts, and will use its deep pockets to spend up to $30 billion to accelerate Australia’s renewable energy transition, a promise that helped garner support for the bid from the competition watchdog. EIG, the consortium’s lead, will acquire Origin’s interest in a Queensland liquefied natural gas subsidiary joint venture, Australia Pacific LNG, through its MidOcean Energy subsidiary.

Edwards warned over the weekend that Origin would need to cut dividends or raise capital, both dilutive to shareholders, to make similar investments. Origin’s own energy transition plans, if it remains listed, are far more modest.

If the bid fails, the consortium said it has a plan B for an off-market takeover at a lower price which could leave the super fund stuck with shares in natural gas assets that it does not want, while Brookfield walks away with the retailing and generation business.