Speaking of AFR's Street Talk. This hot off the presses. Origin...

Speaking of AFR's Street Talk. This hot off the presses.

Origin Energy round two testing arb funds’ patience
Anthony Macdonald, Sarah Thompson and Kanika Sood
Mar 21, 2023 – 9.33pm
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It’s once bitten, twice shy for the M&A arbitrage funds at Origin Energy, who are back stressing about whether Brookfield and EIG will stand up their $18.2 billion offer.

Origin Energy shares are trading at a 12 per cent discount to the $8.90 indicative bid price.  Origin Energy
The arb funds, important players in big listed company deals, have been reworking portfolios this week to factor in oil price movements, cross currency rates and a bit of “the Credit Suisse factor”, to see whether it’s worth sticking around for Brookfield and EIG.
Their nervousness had Origin shares close at $7.82 on Tuesday - their lowest level since the Australian energy giant confirmed its re-cut $8.90 a share indicative bid on February 22.
The funds have been scouting around for proof of life. Bankers on both sides are telling them not to fret, but a falling share price and the wobbly financial market conditions is making it hard for the M&A punters.
Street Talk’s seen a bunch of regulatory filings that suggest Brookfield and EIG are readying corporate structures and the like, which is only something a bidder does at this late stage when it’s still working hard on getting the deal done. The other thing that frightens the hedge funds is the prospect of another price chip.



It’s an interesting situation for the arb funds. They know Brookfield is usually rock solid on its commitments, and are still kicking themselves for doubting the buyer consortium when it faced delays in due diligence at the start of this year. The fast money funds bought back in for round two in late February; their heads are now telling them to on, but the markets says it’s not going to be smooth sailing.
At $7.82, Origin shares closed at a 12 per cent discount to the revised $8.90 a share indicative bid price.