The Origin Energy Ltd (ASX: ORG) share price is rocketing on Wednesday amid news of the $9 per share acquisition offer previously put to the company.
The S&P/ASX 200 Index (ASX: XJO) utilities giant announced the consortium behind the bid is on track to complete its due diligence in the new year. Origin has agreed to extend its exclusivity until 16 January.
Meanwhile, one expert is said to have flagged the stock as an opportunity, saying the market is overestimating the risk of the deal failing.
Right now, the Origin share price is $7.52, 6.21% higher than its previous close. That's also 16% lower than the takeover offer on the table of the company.
For comparison, the ASX 200 is up 1.51% today, recovering all of yesterday's losses.
Let's take a closer look at the news that's seemingly driving the energy giant's stock higher today.
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What's going right for the Origin share price today?
It's a good day to be invested in Origin Energy. The market is bidding its share price higher despite no price-sensitive news having been released by the ASX 200 giant.
Though, the company did reveal the consortium behind its $9 per share takeover offer is planning to sign binding transaction documents after the holiday period, wherein it's expected to complete due diligence. Therefore, Origin has extended the consortium's exclusivity to mid-January.
Meanwhile, RBC Capital Markets believes the ASX's apparent suspicion the deal could fall through has created a buying opportunity. Analyst Gordon Ramsay said, courtesy of the Australian Financial Review:
We see an arbitrage opportunity for investors willing to play this space, particularly since the Origin board has effectively already endorsed the offer in the absence of a superior proposal.
In a worst-case scenario, the bidders may seek a discount on the prior agreed offer price.
Will this discount be as large as the current disconnect between the current Origin share price and the indicative non-binding offer? We would be surprised.
This year has been a good one for Origin stock. The company's share price has gained 40% since the start of 2022. It's also 45% higher than it was this time last year.
Comparatively, the ASX 200 has fallen 6% year to date and 3% over the last 12 months.
