The Brookfield Renewable Partners and MidOcean Energy Consortium has signed a Scheme Implementation Deed (SID) with Origin Energy to acquire 100 per cent of all issued shares – valued at $18.9 billion. The Scheme is currently conditional awaiting further processes including a shareholder vote for approval, court and regulatory approvals and an Independent Expert review, and more.
Transaction Details
Following previous discussions with the Consortium on its revised proposal announced on February 22, 2023, the consideration mix has been amended to comprise $5.78 per share and US$2.19 per share and applies equally to all shareholders.
Based on an assumed AUD/USD exchange rate of 0.70, this implies a total consideration of $8.912 per share.
The total consideration payable will be reduced by any dividends paid by Origin prior to implementation of the Scheme, including the interim 16.5 cents per share fully franked dividend paid to shareholders on 24 March 2023.
Any reduction in the amount payable to shareholders due to the payment of dividends would reduce the Australian dollar component.
The implied consideration of $8.912 per share corresponds to an enterprise value of A$18.7 billion for Origin and represents a premium of:
53.4 per cent to Origin’s closing price of $5.81 per share on November 9, 2022, being the last trading day prior to the initial proposal by the Consortium
59 per cent to Origin’s one month VWAP of $5.60 per share on November 9, 2022
54.7 per cent to Origin’s three month VWAP of $5.76 per share on November 9, 2022
Scheme conditions
The Scheme is conditional upon the satisfaction of certain conditions, including:
Origin shareholders approving the Scheme at a meeting of shareholders (Scheme Meeting);
Court and regulatory approvals including the Foreign Investment Review Board (FIRB), the Australian Competition and Consumer Commission (ACCC), the National Offshore Petroleum Titles
Administrator and certain other foreign investment approvals;
The issue of an Independent Expert’s Report that concludes that the Scheme is in the best interests of Origin shareholders; and
customary other conditions, including that no material adverse change occurs prior to implementation.
The SID contains customary exclusivity obligations, including ‘no shop’, ‘no talk’, ‘no due diligence’, notification obligations and a matching right regime in respect of any superior proposal received by Origin. The SID also details circumstances under which Origin may be required to pay a reimbursement fee to the Consortium should the Scheme not proceed.
Brookfield Asset Management and Head of Transition Investing, Chair, Mark Carney, said, “As the energy transition gathers pace, what’s needed is increasingly clear: faster deployment of large-scale renewables, the accelerated, responsible retirement of coal generation, and an interim, supportive role for gas as the dependable back-up fuel.
“Brookfield is determined that the new Origin Energy Markets will lead the way in all respects at this critical moment for the Australian economy.”
EIG CEO, Blair Thomas, said, “LNG will be critical in delivering energy transition targets, and this transaction is a compelling opportunity to accelerate EIG’s strategy of gaining exposure to high quality LNG assets around the globe.
“We have long been attracted to the Australian market, with an established presence in Australia since 2000, and look forward to playing a pivotal role in meeting Australia’s transition targets by enabling broader decarbonization efforts at APLNG.”
Brookfield Asia Pacific CEO, Stewart Upson, said, “The acquisition of Origin Energy presents Brookfield with a unique opportunity to invest at least $20 billion and make a material difference to achieving Australia’s net zero targets.
“We will build on the success of our global renewable power and transition business where we have a mandate to ‘go where the emissions are’ in putting billions of dollars behind an executable plan to reduce emissions at Origin.
“Brookfield has the capital, expertise, supply chain strength and global track record that’s needed to transform Origin’s generation fleet to greener sources and accelerate Australia’s energy transition while ensuring network security and reliability.”
MidOcean Energy CEO, De la Rey Venter, said, “We’re thrilled to join forces with Brookfield and Origin in this transaction and to further expand our footprint in Australia. Origin’s Integrated Gas business adds world-class assets to our portfolio – assets that fit our strategy to create a high quality, diversified, global ‘pure play’ integrated LNG company.
“We look forward to working with all stakeholders to help facilitate Australia’s energy transition, to bring stable and affordable gas supply to the domestic market and to provide a reliable supply of LNG to the region for decades to come.”
