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Revised bid structure for Origin Energy faces strong opposition

The revised bid structure from Brookfield and EIG for Origin Energy (ASX:ORG) appears to be in jeopardy, based on market sentiment and reactions from key stakeholders. Australian Super’s rejection of the new proposed offer and the lukewarm response from the Origin board have cast doubts on its approval at the upcoming shareholders’ meeting on December 4.

Market Signals Negative Outlook

The market has responded negatively to the third offer from Brookfield and EIG, with Origin Energy’s shares sliding 1.07% lower after initially nudging higher. The rejection of the new offer by AustralianSuper, labeling it a “low ball” and detrimental to Origin shareholders, has added to the prevailing sense of rejection.

Origin’s Shares Performance

Origin Energy’s shares, which closed at $8.42 on Wednesday, fell to $8.33 after trading resumed Thursday afternoon. This drop in share price further complicates the bid’s prospects, as it stands $1.01 below the second offer price.

Origin Board’s Mixed Reception

The Origin board initially confirmed that the $9.43 per share deal was dead and expressed significant reservations about the complexity, conditionality, and differing value of the new proposal. While they continue to assess the revised proposal, their failure to endorse it reflects their disappointment with the price cut in the third offer.

AustralianSuper’s Strong Opposition

AustralianSuper has vehemently opposed the new offer, viewing it as an attempt to buy more time for the original offer. They believe it is a “low-ball offer” that favors a private equity consortium over investors and falls substantially below their estimate of Origin’s long-term value. AustralianSuper, with a stake of over 17% in Origin, has announced its rejection of the revised offer.

Future Outlook

The suitors, Brookfield and EIG, hope to secure nervous shareholders’ agreement to the $9.43 per share deal or, failing that, seek approval for asset sales through an ordinary resolution at the meeting. However, this resolution only requires 50.1% approval, which would bypass the influence of AustralianSuper’s 16.5% blocking stake.

If the Origin board does not endorse the new proposal, it is likely to face further challenges, with AustralianSuper determined to thwart the deal. The bid’s future remains uncertain, with strong opposition from key stakeholders.

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