Today: 14-04-2024

Climate Conundrum: Brookfield's Ambitious Deal Faces an Energy Dilemma

In a spine-chilling move on Halloween, AustralianSuper, the top pension fund in Australia, aims to cast a shadow over Brookfield Asset Management and co-bidder MidOcean Energy in their pursuit of Origin Energy. With plans to vote its nearly 14% stake against the current A$18.7 billion ($12 billion) offer next month, AustralianSuper's opposition could haunt the proposed buyout, as a 75% shareholder vote is required for approval. Perpetual, owning around 3%, had previously criticized the offer as too low, leaving little room for error for the buyers. If AustralianSuper increases its stake to 19.9%, it could wield significant influence over the terms of the deal. The pension fund suggests a boost in the valuation based on recent power deals, potentially adding over $7 billion to Origin's value. However, this ghostly intervention by the pension fund may well spook the deal to its demise, leaving Brookfield and MidOcean in a precarious position.

As the specter of AustralianSuper's dissent looms over Brookfield Asset Management and MidOcean Energy's bid for Origin Energy, the deal's fate hangs in the balance. With AustralianSuper poised to vote its substantial stake against the current offer and Perpetual already deeming it too low, the buyers face a daunting challenge. The narrow margin for error in securing the required 75% shareholder approval becomes even more precarious in the face of increased opposition. AustralianSuper's potential influence, especially if it raises its stake to 19.9%, adds an additional layer of complexity to the negotiations. The proposed remedy of a higher valuation based on recent power deals may not be sufficient to dispel the ominous shadows cast by the pension fund's intervention. As the Halloween deadline approaches, the outcome remains uncertain, and the deal may be at risk of unraveling under the weight of investor discontent and financial apprehensions.