The foreign bidders for Origin Energy will have to fork out a lot more than the $18.7 billion they have on the table for the Australian energy group after a major shareholder lifted its stake and indicated it was doing so because the current offer was not good enough.
Origin Energy’s largest shareholder, AustralianSuper, says the company’s share price is “substantially below” its long-term value, a statement that strongly suggests Brookfield and US energy investor, EIG will need to increase their $8.912 a share offer.
Australian Super revealed on Thursday that it had lifted its stake in origin by 1.02% to 13.68% and said “Origin’s current share price is substantially below our estimate of its long-term value and this is why we have increased our holding in the company.”
Origin shares were lower Thursday afternoon at around $8.66 in the wake of the Australian Super news earlier in the session.
Three times in the past month, Australian Super has paid a high of $8.69 for Origin shares as part of a buying spree from mid 2022 to this week that saw it lift its holding by more than 17.4 million to over 235 million Origin shares.
That’s worth (at the current offer price) nearly $2.1 billion.
Brookfield and EIG have been under growing pressure to lift their offer price because of the much improved outlook for Origin with the disruption in gas and coal prices over and the continuing rapid growth of its 20% owned US energy retailer, Octopus Energy and its parent, Octopus Group.
Earlier this month Octopus added Shell’s 2 million energy customers in the UK and Germany.