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Trading halted as new bid structure emerges for Origin Energy

Trading in Origin Energy (ASX:ORG) shares has been halted after Canada’s Brookfield and EIG Partners of the US, the company’s suitors, introduced a new bid structure to address the imminent defeat of their second offer at an Origin shareholders’ meeting in Sydney. The meeting will be paused to allow shareholders to receive the new bid. The trading halt will remain in effect until the official announcement, expected later today or at the latest, Friday, according to Origin’s communication with the ASX.

Reports indicate that the two bidders have presented a revised takeover offer for Origin Energy, which forms part of a new two-pronged deal they wish to propose to shareholders. The new offer, sent to Origin on Wednesday night, suggests shareholders will be offered approximately $9.20 per share if the scheme of arrangement vote, initially scheduled for Thursday’s shareholders meeting, is rejected. This proposed price is lower than the previous second offer, which ranged from $9.43 to $9.53 depending on exchange rates, while the initial offer was $8.91.

Origin shares closed at $8.42 on Wednesday, up 1.69%, but still below the offer price of $9.43 per share. The Brookfield consortium had previously proposed $6.59 and $US1.86 in cash, along with a $0.39 special dividend.

The current offer was widely expected to be rejected, especially after Australian Super, holding a 16.5% stake in Origin, expressed its intention to vote against it, believing that the offer significantly undervalued the company’s potential to profit from the transition to renewable energy. Proxy votes were set to be submitted on Tuesday, and the emergence of this new plan signifies the deal’s impending demise.

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