- Australia’s Origin Energy Ltd (OTC:OGFGY) (OTC:OGFGF) bagged a takeover proposal worth around $10 billion from a consortium led by Brookfield Asset Management Inc. (NYSE:BAM).
- Origin said the consortium comprising Brookfield and the LNG arm of private-equity firm EIG had indicated it would make a cash offer at 9 Australian dollars a share, equivalent to $5.79.
- Origin said its board plans to recommend that shareholders vote in favor of a deal if the consortium makes a formal bid after completing due diligence and in the absence of a superior proposal.
- The consortium’s latest offer follows two earlier proposals.
- Origin is a significant shareholder in the Australia Pacific LNG plant in eastern Australia’s Queensland state, which supplies liquefied natural gas to Asia, the Wall Street Journal reports.
- The ConocoPhillips (NYSE:COP) operated facility has benefited from elevated LNG prices after Russia’s invasion of Ukraine, as European countries scour the world for alternative sources to Russian supply.
- The report added that Origin also owns power plants and is one of Australia’s most considerable electricity and gas retailers to households and businesses.
- The proposal would ultimately result in Brookfield acquiring Origin’s Energy Markets business and MidOcean buying the Integrated Gas business.
- Last year, Origin agreed to sell a 10% stake in the Australia Pacific LNG project to EIG for 2.12 billion Australian dollars. Still, the deal failed as ConocoPhillips exercised its pre-emption rights to acquire the interest instead.
- Analysts expect LNG prices to remain high for some time as Europe spends billions of dollars to wean itself off Russian gas, despite China’s economic weakness and potential for a global recession.
- Price Action: OGFGY shares closed 2.14%higher at $3.70 on Wednesday.
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