SYDNEY – In a significant development, CGI Glass Lewis, a leading proxy advisor, has recommended that shareholders of Origin Energy vote in favour of a $10.5 billion bid from a consortium led by Canada’s Brookfield. This recommendation comes despite opposition from the target’s largest shareholder. Last week, Brookfield and EIG Partners offered a “best and final” A$9.53 per share for Origin, marking an increase from their previous bid.
However, Australia’s largest pension fund, AustralianSuper, which holds a 15% stake in Origin, opposes the offer and intends to vote against the deal at a Nov. 23 shareholder meeting. The opposition from AustralianSuper presents a significant hurdle for the deal, which requires 75% of shareholder votes cast to pass. Given that many retail investors tend not to vote, this opposition risks sinking the deal. AustralianSuper has expressed concern that the deal potentially undervalues Origin’s ability to profit from the country’s transition to renewable energy.
However, CGI Glass Lewis has stated that the deal is fair given the uncertainty around how these changes would play out. The support from CGI Glass Lewis, which follows the deal’s backing by fellow proxy advisory firm Institutional Shareholder Services (ISS) on Tuesday, is a boost for Origin and the consortium. They are currently campaigning to win over investors large and small ahead of the meeting later this month.
Shares of Origin Energy saw an increase of 1.9%, trading at A$8.905 as of 2 p.m. Origin Energy shares traded at A$8.905 at 2 p.m. AEDT (0300 GMT) and have increased by 5.1% since the close of trade on November 2nd. 2, when AustralianSuper rejected the improved offer. The deal would allow investors to cash out at a premium. Despite the concerns raised by AustralianSuper, the support from CGI Glass Lewis and ISS is a significant boost for Origin and the consortium as they continue their campaign to win over investors.