The future of one of the largest takeovers in Australian history, for energy giant Origin, is perched on a knife edge.from Brookfield and EIG looked generous last year, but today it looks a bit miserly.
Thus, the independent experts’ report from Grant Samuel released on Thursday that deemed the offer price fair and reasonable was something of a sideshow.It referenced what it called a roll-forward valuation, alluding to what the company could be worth in December. And this is 40¢ a share more than it was worth at the end of June, which was the snapshot in time used by the experts to value the company.
And it’s also fair to say that landing on a point-in-time valuation for any company, particularly one in the ever-changing energy market, is a fraught exercise, and made even harder when the time between agreeing on a price and completing the transaction has been 10 months.Brookfield would contend that it has addressed this issue with a “ticking fee” clause that would raise the value of its offer by 4.5¢ per month if the deal was completed by November.
Brookfield and EIG could walk away and take with it the incredible opportunity – that particularly Brookfield provides – for funding Origin’s $20 billion transition from a major carbon emitter to a cleaner energy provider.
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