Origin Energy Limited (Origin), an Australian energy company, has granted a buyout consortium led by Brookfield more time for due diligence as concerns about the proposed acquisition continue to grow and to consider the recently imposed gas price cap.
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Consortium has requested additional time
The buyout consortium, which includes Brookfield Asset Management and other institutional investors, had originally been given a deadline of December 14th to conduct due diligence on Origin’s books and make a final decision on the acquisition. However, Origin announced Tuesday that it has again extended that deadline to January 24th, citing the need for more time to address concerns raised by shareholders and other stakeholders.
Origin receives a non-binding, indicative offer at $9.00 per share
Australia’s Origin Energy refers to its announcement from December 21, 2022, regarding the indicative, conditional, and non-binding proposal from a consortium made up of US-based gas supplier MidOcean Energy (MidOcean), an LNG company established and managed by US EIG and Canada’s Brookfield Asset Management Inc. (Brookfield), to acquire all of Origin’s issued shares through a scheme of arrangement for $9.00 in cash per share. This indicative proposal values Origin at $18.4 billion on an enterprise value basis.
Critics have also raised concerns about Brookfield’s acquisition record and the potential for the buyout consortium to take on too much debt to finance the deal. In light of these concerns, Origin has decided to grant more time for the Brookfield-led consortium to review the company’s books and make a more informed decision.
Origin has stated that it will work closely with the consortium to address any issues that may arise during the due diligence process and that it will not proceed with the acquisition unless it is in the best interests of shareholders and other stakeholders.
Origin did not specify a reason
Concerns regarding the proposal’s status were raised by Origin Energy’s failure to provide a reason for the extension. The proposed acquisition by Brookfield and its consortium is still uncertain, and the extension of the deadline for due diligence by Origin Energy shows the company’s commitment to being transparent and addressing the concerns of its shareholders and stakeholders.
Origin Energy at a glance
Origin Energy is a significant integrated energy generator, as well as a retailer of electricity and natural gas. At Lake Macquarie, New South Wales, it operates the largest coal-fired power plant in Australia.
Current projects​​ Origin is in charge of developing the CSG fields in the Surat and Bowen basins and the major transmission pipeline that carries the gas to the LNG facility on Curtis Island near Gladstone as Australia Pacific LNG’s upstream operator.
Origin uses a range of energy sources to make electricity, from traditional fuels like coal and natural gas to renewables like solar and wind power. It is expanding its portfolio of large-scale solar, battery energy storage systems, and pumped storage hydro initiatives to assist the demand for cleaner energy.
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