Australia’s Origin Energy offers $10 billion takeover bid

  • australia Origin Energy Ltd. (OTC: OGFGY) (OTC: OGFGF) submitted a takeover proposal worth approximately $10 billion to a consortium led by Brookfield Asset Management Inc. (NYSE:BAM).

  • Origin said the consortium comprising Brookfield and the LNG arm of private equity firm EIG had indicated it would make a cash offer at A$9 per share, or $5.79.

  • Origin said its board plans to recommend that shareholders vote in favor of a deal if the consortium makes a formal offer after completing due diligence and in the absence of a superior proposal.

  • The consortium’s latest offer follows two previous proposals.

  • Origin is a major shareholder in the Australia Pacific LNG plant in the eastern Australian state of Queensland, which supplies liquefied natural gas to Asia, reports the Wall Street Journal.

  • The Conoco Phillips (NYSE: COP) benefited from high LNG prices following Russia’s invasion of Ukraine, as European countries scour the world for alternative sources to Russian supply.

  • The report adds that Origin also owns power stations and is one of Australia’s largest electricity and gas retailers for households and businesses.

  • The proposal would ultimately result in Brookfield acquiring Origin’s Energy Markets business and MidOcean acquiring the Integrated Gas business.

  • Last year, Origin agreed to sell a 10% stake in the Australia Pacific LNG project to EIG for A$2.12 billion. Yet the deal fell through as ConocoPhillips exercised its preemptive rights to acquire the interest instead.

  • Analysts expect LNG prices to remain high for some time as Europe spends billions of dollars to wean itself off Russian gas, despite China’s economic weakness and the potential for a global recession.

  • Price action: OGFGY shares closed up 2.14% at $3.70 on Wednesday.

  • Photo via company

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