EIG and Brookfield have submitted their best and final offer for Origin Energy, which increased by 8% and valued Origin at nearly $20 billion.
👉 Background: Origin Energy is one of Australia's leading Australian energy company with over 4.2 million customers. And for a year now, they've been in a will-they-won't-they takeover situationship with Brookfield and EIG.
👉 What happened: Now, EIG and Brookfield have submitted their best and final offer, which increased by 8% and valued Origin at nearly $20 billion. But Origin Energy's biggest shareholder, Australian Super, has outright rejected the latest takeover offer.
Under the current deal arrangements, 75% of voting shareholders need to vote in favour of the takeover deal for it to be successful. And since Australian Super owns nearly 14% of Origin, it's likely to have enough power to derail this offer.
👉 What else: But as part of this improved offer, Brookfield and EIG have another opportunity to acquire Origin Energy. And this time, Origin may have their shareholders snookered.
💡Sometimes to get a deal done, you need to craft the end game from the start.
💡Both Origin Energy's board members and Brookfield/EIG want this deal to go through. So, they've inserted a clause that allows a second chance to proceed with the acquisition... if the current offer fails.
💡Under the fallback clause, Brookfield and EIG would only need to win over 50.1% of shareholders rather than 75%. And, this gives them a better chance of successfully acquiring Origin Energy even if some shareholders aren't in favour of the deal. Lookin' at you Australian Super.
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