AustralianSuper doubles down on Origin Energy

AustralianSuper has increased its holding in Origin Energy to 15.03 per cent, solidifying its position as Origin’s biggest shareholder and reaffirming its rejection of the current takeover bid.

The super fund is opposing the deal from a consortium comprised of investment manager Brookfield and private equity firm EIG, believing it is priced well below its estimates of Origin’s long-term value.

Last week, the fund announced it will reject the bid despite the consortium increasing its offer price to $9.53 per share that it said is its “best and final offer”.

“AustralianSuper believes 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,” the fund said in a statement.

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“AustralianSuper will always look at opportunities to invest in compelling long-term energy transition opportunities that deliver for members. The fund 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.”

AustralianSuper also confirmed that it is not in discussions to join the bidding consortium.

This doubling down from Origin’s largest shareholder came at the same time proxy adviser Institutional Shareholder Services (ISS) recommended investors accept the deal. They said it offers investors a chance to cash out at a reasonable premium in return for surrendering the payoff for a potential energy transition.

The takeover is currently priced at $9.53 per share, increased from its original offer of $8.81, and has the recommendation of the board. Shareholders will cast their votes at a meeting on 23 November and the deal requires 75 per cent in favour to pass.

A spokesperson for the bidding consortium claimed “momentum is clearly building” and called on investors to accept the deal.

“In addition to the favourable investor feedback we have received, today’s ISS recommendation represents another independent voice that supports accepting the compelling and certain value we have offered,” the spokesperson said.

“Origin investors have a clear choice; to accept $9.53 for their shares which is higher than even the most optimistic view of the independent expert versus taking on the risks, uncertainty, volatility and cost of the energy transition themselves.”