AustralianSuper has confirmed that it will reject Brookfield's $18.7 billion takeover bid for Origin Energy, citing the company's value as a platform for Australia's energy transition.
Kingmakers on either side of Origin Energy ’s $18.7 billion takeover, they are chasing the same thing.AustralianSuper’s investment team, run by CIO Mark Delaney, chose when to enter the Origin Energy debate.Neither of them see Origin Energy as just a collection of up-and-running electricity generators, a big customer book or a stake in a big LNG project.
By relevant, it is talking about a basket of energy transition-styled deals and stocks, and not the historical deals – some signed well before the transition was a thing – in independent expert Grant Samuel’s report, which is now the reference point for any talks about value. Further, there was Meridian’s sale of its Powershop retail business in November 2021, which included a couple of poor quality wind farms and developments, for 20 times historical EBITDA, and the red-hot Tilt Renewables auction with a winning bid at 28 times EBITDA.The bookend – struck before the transition gathered steam – was relatively mature wind farms owner Infigen Energy, sold for 14 times EBITDA in 2020.
Origin is a unique beast; it is the largest energy retailer in Australia with cost-to-serve scale benefits including from its technology platform Kraken. And it also owns the largest portfolio of peaking generators, with assets across the national electricity market in NSW, Victoria, Queensland and South Australia.
They have done everything right thus far and earned every right to push on with their binding agreement.If it truly thinks that is still the case, it can call its bid “best and final” and go to the meeting knowing AusSuper will vote its 13.7 per cent stake against the deal. The other option is to do something about the situation beforehand, and it has 3½ weeks to choose.
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