Own Origin shares? Why you should vote against its takeover

AustralianSuper says investors should say no to a takeover.

| More on:
A woman crosses her hands in front of her body in a defensive stance indicating a trading halt.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you own Origin Energy Ltd (ASX: ORG) shares, you're going to have a big decision to make in a couple of weeks.

On 4 December, shareholders will be asked to vote on the revised takeover proposal from the Brookfield-led consortium of investors and EIG.

The suitors have offered a total cash payment of approximately $9.431 per share.

Alternatively, if that is voted down, there is a backup transaction option of $9.08 per share. That is subject to a 50.1% minimum acceptance condition.

How should you vote on your Origin shares?

Origin's largest shareholder, AustralianSuper, is urging shareholders to vote their shares against the takeover. It believes that investors are being short-changed by Brookfield and EIG. The super fund commented:

AustralianSuper will be voting against the revised proposal for Origin, made public by the company board today, if the board decides to put it to a vote. This latest low-ball offer strengthens AustralianSuper's view that the offer remains substantially below our estimate of Origin's long-term value.

And despite the new proposal including the potential opportunity for institutional shareholders like AustralianSuper to re-invest into the Brookfield-owned Energy Markets business after completion of the scheme, it isn't interested. It adds:

AustralianSuper is resolute the value and future value of Origin is better in the hands of AustralianSuper members and other shareholders than a private equity consortium planning to shortchange them.

Overall, the super fund appears to believe that Origin shares are a great long-term investment option for local investors and that parting ways with them at this level would be unwise. It concludes:

AustralianSuper believes the ongoing energy transition has further enhanced the value of strategic energy transition platforms, such as Origin. AustralianSuper is a long-term investor in the Australian economy and is open to providing capital to assist Origin as it prepares to transition over the coming decades, while delivering on our purpose to help members achieve their best financial position in retirement.

The challenge facing the nation as we work towards net zero by 2050 is not a lack of capital but rather a shortage of good quality investment opportunities.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

Oil worker using a smartphone in front of an oil rig.
Energy Shares

Does Macquarie rate Woodside Energy shares a buy, hold or sell?

Let's see what the broker is saying about the energy giant.

Read more »

Coal miner standing in a coal mine.
Energy Shares

Up 62% since April, what's happening with Whitehaven shares today?

Whitehaven shares have enjoyed a strong rally since April despite weak coal prices.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Energy Shares

Why Macquarie sees Paladin Energy shares as a buy in the dip opportunity

This uranium stock could be a buy according to the broker.

Read more »

Happy man working on his laptop.
Energy Shares

Opportunity knocks: 2 ASX stocks ready to surge

Analysts expect big things from these shares.

Read more »

Two businesspeople walk in opposite directions on a staircase with arrows under their arms, one pointing up and one pointing down.
Energy Shares

3 largest ASX uranium shares move in different directions amid fresh developments

Here's what is happening with Paladin Energy, Deep Yellow, and Boss Energy shares on Thursday.

Read more »

Bored man sitting at his desk with his laptop.
Energy Shares

Guess which ASX 200 share is sinking 6% on shock CEO exit

Investors are reacting negatively to this surprise news.

Read more »

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.
Energy Shares

Should you buy Paladin Energy shares after the selloff?

Let's see what Bell Potter is saying about the uranium stock.

Read more »

A smiling woman puts fuel into her car at a petrol pump.
Energy Shares

Guess which ASX 200 energy stock is leaping higher on earnings growth

Investors are sending the ASX 200 energy stock sharply higher on Wednesday.

Read more »