An independent expert’s report into a Brookfield-led consortium’s A$15.35-billion ($9.67-billion) bid for Australia’s Origin Energy has deemed the offer fair value, but the takeover is facing growing resistance from investors.
Origin Energy on Thursday said an independent evaluation by corporate advisory firm Grant Samuel of Australia’s largest energy retailer’s equity valued it at A$8.45 – A$9.48 per share.
The range covers the offer price of about A$8.81 apiece from the consortium’s March bid, which consists of Australia dollars, U.S. dollars and dividend components.
However, the report outlines a “roll forward” calculation that says Origin’s shares could be worth an additional 40 Australian cents by the time a potential takeover is due to occur, which puts the lower end of the range above the bid price.
A vote on the takeover will be held on Nov. 23, Origin’s filings on Thursday said.
Despite the independent assessment, Origin shares are trading well above the offer price, hitting a five-year high of A$9.32 on Monday, an indication investors expect a higher bid will be needed to win control of the firm. The shares closed at A$9.22 on Thursday.
“I imagine there’s still a pretty strong desire from the vocal holders to see more,” said Max Vickerson, an analyst at stockbroker Morgans.
Brookfield BN-T declined to comment on the independent’s expert report.
The deal requires shareholder approval by 75 per cent of votes cast at a scheme meeting. Australian Super, the largest investor, raised its stake to 14 per cent last month and called the shares undervalued.
Australian Super declined to comment on whether it would vote in favor of the Brookfield-led bid.
Australian fund manager Perpetual has said it believes the offer is undervalued and owns about 3 per cent of Origin’s shares, according to local media reports. It did not immediately respond to a request for comment.
Under the proposed takeover, Origin will be broken up into two businesses, with its energy markets arm including its electricity generation and electricity and gas retail businesses to be acquired by Brookfield.
EIG’s MidOcean Energy, the other consortium partner, will take control of Origin’s integrated gas business.
A recent report from Macquarie said the consortium bid should be closer to A$10 per share.