From this mornings AFR:
Origin Energy bidders ready to sign on the dotted line
Anthony Macdonald, Sarah Thompson and
Kanika Sood
Mar 9, 2023 – 9.33pm
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Brookfield Asset Management and EIG Partners are on track to sign a binding $18.2 billion takeover for Origin Energy as early as next week, bringing to a head seven months of negotiations.
Origin Energy’s bidders are understood to be finalising the final details in the scheme implementation deed.
Street Talk understands the joint bidders have ticked off price, acquisition funding and worked through impacts from recent regulatory changes, and were aiming to sign the formal scheme implementation deed in the middle of this month.
That would be ahead of the April 1 kick-in date for the federal government’s proposed gas export guidelines under the
Australian Domestic Gas Security Mechanism (ADGSM), which would extend to Origin’s Australia Pacific LNG venture in Queensland. The government ran a two-week consultation that ended on February 23.
Sources said the bidders have had time to think about the new regulations and did not see any problems that would stop them chasing their bid, which was recut from $9 a share to
$8.90 in late February. Origin’s board is expected to back the deal at the revised price.
A spokesperson for Origin declined to comment.
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ORGOrigin Energy
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Mar 22Sep 22Mar 235.1006.8008.500
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The parties are in the final stages of negotiating the scheme implementation deed, which would turn the indicative and non-binding proposal into a fully fledged and binding agreement.
It would remain subject to a handful of conditions, including ACCC approval, material adverse changes to the business and approval from Origin’s shareholders.
Both Brookfield and EIG were expected to
bring co-investors into the deal.
It means that barring an 11th-hour freak event, Origin Energy should become the largest public M&A transaction to come out of last year, which was a slow year for deals. It’s likely to take months to complete.
Brookfield and EIG (via subsidiary MidOcean Energy) approached Origin Energy’s board at $7.95 a share (or $7.79 if the dividend is excluded) in August, but were knocked back. They lobbed revised bids at $8.70 to $8.90 a share in mid-September, before securing due diligence with an offer at $9 a share.
A few tense weeks followed for Origin shareholders, including an expiry of exclusive due diligence without a bid. The bidders came back with a recut $8.90 a share bid in late February.
The latest iteration, which looks to become the winning bid,
included provisions for the bidders to cover their currency risk (via changing part of the cash consideration to US dollars) and commodity exposures (via asking Origin to enter hedge oil and LNG commodity exposures).
The bidders intend to split Origin’s ownership, with Brookfield owning power generation and energy retailing and EIG’s MidOcean taking Origin’s 27.5 per cent stake in APLNG.
(20min delay)