Brookfield and MidOcean make an $18bn Origin Energy bid; Shareholders & the board like it

Brookfield and Midocean have made another Origin Energy bid and this time it might be a case of third time lucky. Two earlier bids were met with the cold shoulder but after twice increasing the price, Origin Energy told shareholders it would back the bid if it became a formal, binding offer.  

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The third Origin Energy bid this year

Since August, Origin Energy and its suitors have negotiated behind closed doors. The first bid was at $7.95 per share (inclusive of Origin’s H2 FY22 dividend) and the second was at $8.70-$8.90 per share.

This morning, the third Origin Energy bid was made public, coming in at $9 a share which values the company at $18.4bn. Origin shares rose by 34% to $7.84 at the market open, but falling short of the indicated offer.

The offer looks like it will go ahead

This Origin Energy bid is a 55% premium to yesterday’s closing price and unsurprisingly, Origin’s board told shareholders it would recommend shareholders accept the offer if it became a binding offer and in absence of a superior proposal. 

If the Origin Energy bid is accepted goes ahead, the company would be split in two with MidOcean taking Australia Pacific LNG and Brookfield taking Origin’s core electricity and gas retailing and supply business. The share price rise this morning indicates that shareholders are optimistic that the deal will be completed. 

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