Fund manager welcomes AustralianSuper’s ‘corporate muscle’ on Origin

Fund manager Datt Capital believes AustralianSuper is making the right decision in voting against a bid from Brookfield to acquire Origin Energy and welcomed its strong intent.

Emanuel Datt, chief investment officer at Australian equities fund manager Datt Capital, agreed the offer from Brookfield and a consortium of investors “materially undervalues” the energy provider. 

This is despite the firm upping its bid earlier this month from $8.81 per share to $9.53 per share, which it said is its “best and final offer”. This is at the top of the valuation range set by the independent expert of $8.45–$9.48 per share.

AustralianSuper is the largest shareholder of Origin and has been steadily increasing its weighting to reach 15 per cent and vocally rejecting the Brookfield bid. 

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“The new offer for Origin still materially undervalues the sum of parts valuation of Origin, which is a high-quality portfolio of energy assets including a fast-growing global business in Octopus Energy,” Datt said.

“AustralianSuper, one of Australia’s largest super funds with $300 billion portfolio, continues to reject the bid.

This is a welcome change as typically public super funds have been passive onlookers on key M&A activities despite their outsized influence on local equity markets.

“AustralianSuper’s decision reflects its alignment with members’ interests and the broader national interest in maintaining key assets and aiding energy transition.”

On 21 November, Origin issued a statement to its shareholders, urging them to support the bid in the absence of a superior proposal. 

He said there is a tendency in the superannuation industry for funds to allow themselves to be overruled by overseas firms.

“For far too long super funds have meekly stood on the sidelines, allowing many overseas investors to secure control of strategically important infrastructure assets within Australia. This also shows their lack of strategic vision in understanding the value of individual holdings, as they continue to outsource significant voting decisions and accountability to proxy advisers,” Datt said.

“The contemporary, muscular approach by AustralianSuper is well-overdue. This decision is consistent with the objectives of superannuation, which is a pool of long-duration investment monies that require long-term, sustainable holdings to support the needs of their fund members.”