The latest article hot off the AFR presses. If accurate, I'd be...

The latest article hot off the AFR presses. If accurate, I'd be telling Brookfield/EIG to take a hike. They're trying to take advantage of short term issues caused by the Federal Government to grab ORG at a bargain price (mind you, can't blame them for trying). ORG hold all the cards I reckon.



Canada’s Brookfield and US private equity group EIG Partners have held talks to re-price their $9 a share joint bid for Origin Energy, to reflect what they see as heightened risk since due diligence started in November.
It is understood Brookfield and EIG Partners have discussed lowering their offer below the $9 mark with Origin Energy and its advisers in the past week, to gauge the ASX-listed giant’s willingness to recommend a lower offer.

Origin Energy’s been taking Brookfield and EIG Partners through due diligence since November.  Photo: Jack Atley
Brookfield and EIG Partners believe changes in the regulatory environment - particularly the gas price cap which impacts earnings at Origin’s Australia Pacific LNG project - have created material uncertainty around the group’s long-term earnings outlook.
While the gas price cap has been set at $12 a gigajoule for 2023, the industry’s still waiting on the federal government to reveal new market rules and its mandatory code of conduct for gas suppliers.
The policy settings have changed markedly since August, when Brookfield first approached Origin Energy’s board, and November, when the bidders secured exclusive due diligence with a $9 a share indicative offer.

  
Origin Energy has argued the changes are positive for near term earnings - even upgrading its FY23 underlying EBITDA guidance on Friday - however the bidders are trying to value the business on a much longer timeframe.
Origin Energy’s board is understood to be digging its heels in at $9 a share, and pointing to the recent upgrade and the share prices of rival groups to show that the changes shouldn’t have impacted the company’s value.
The board has been willing to give Brookfield and EIG Partners more time to get comfortable with the changes, extending the pair’s exclusivity twice and allowing it extra time in the data room, however is understood to be have been steadfast on the pricing talks.
Origin Energy’s also well aware that Brookfield and EIG Partners have to get their own co-investors and lenders comfortable with the offer.
Spokespeople for Brookfield and Origin Energy declined to comment on Wednesday.
While the talks play out, the market’s cautious about the chances for a deal. Origin Energy shares closed at $7.41 on Wednesday. They were trading below $6 prior to Brookfield and EIG’s offer being made public in November.