Origin Energy: Takeover excites but approvals aren’t guaranteed

About the author:

Max Vickerson
Author name:
By Max Vickerson
Job title:
Date posted:
11 November 2022, 7:00 AM
Sectors Covered:
Industrials, New Energy

  • Brookfield and EIG have launched an indicative, all-cash, takeover bid for Origin Energy (ASX:ORG) at $9ps which the board will recommend following a due diligence period.
  • The deal is subject to FIRB and ACCC approvals which adds some risk given tight energy markets. Investors appear to be factoring this in as the stock closed at (login to view).
  • We maintain our HOLD rating given the large amount of regulatory uncertainty that was already present before the bid arose.


ORG announced the $9ps non-binding indicative takeover offer today and disclosed that there were also two previous bids from the consortium. The first bid was $7.79ps (ex-div basis) on 8 August which was then subsequently increased to $8.70ps - $8.90ps on 18 September. The board will unanimously back the current offer following an 8 week exclusive due diligence period.

The price of the offer will be adjusted for any dividend paid by ORG before implementation. The consortium has also agreed to a 3cps per month increase in the price if implementation is not complete before 15 May 2023.

The deal is subject to FIRB and ACCC approval as well as a shareholder vote. Other key regulatory issues like gas price caps or potential “super taxes” have also not been resolved and could influence the takeover negotiations in the future.

Investment view

It’s clear that the consortium has been interested in pursuing ORG’s assets for some time and is prepared to pay a premium for it. It’s interesting that the offer price has increased even as the regulatory environment becomes more hazardous for energy companies.

Despite the enthusiasm of the buyers and the potential 15% bid premium to today’s closing price we retain our HOLD rating due to the uncertainty in regulatory approvals being granted.

Price catalysts

  • Completion of the 8 week due diligence period.
  • Regulatory approvals.
  • Emergence of a superior bid.


  • Successful completion of the takeover offer including conversion to a binding offer, receipt of regulatory and shareholder approvals.
  • Availability of fuel, generation performance and renegotiation of Eraring fuel contracts.
  • Commodity prices (oil, gas, electricity, coal, carbon). 
  • Energy markets regulation. 
  • Interest rates.
  • Tax regimes.

    Find out more

    Download full research note

    If you would like more information, please contact your adviser or nearest Morgans office. 

    Request a call Find local branch

    Need access to our research?

    You are also welcome to start a two-week trial of our online platform, which provides access to detailed market analysis and insights, provided by our award-winning research team

    Create trial account 

    Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.



    Add your comment


    • Print this page
    • Copy Link