Brookfield Asset Management (BAM.TO), has some wounds to lick. On Monday the Canadian investment firm’s joint $13 billion offer with MidOcean Energy for Australian power generator and retailer Origin Energy (ORG.AX)failed after the bidders secured backing from 69% of voted shares, below the required 75% threshold. The next challenge is to bounce back from its battering Down Under.
The firm run by Bruce Flatt may yet try other avenues for buying Origin, including a hostile takeover – though the Australian government’s recent decision to triple its own backing for renewables prompted Brookfield on Friday to hit pause on that. It could target smaller local energy firms, like Alinta Energy and EnergyAustralia, owned by Hong Kong-based Chow Tai Fook Enterprises and CLP (0002.HK) respectively. That would limit the chance of powerful domestic shareholders like AustralianSuper scuppering another deal. Canberra’s sweeteners may even obviate the need to own a power company. Or Brookfield could simply take its climate financing to other countries.
Brookfield has made other investments from its $15 billion global transition fund, including to co-buy Westinghouse Electric. However, Origin would have been the fund’s showcase for shifting a company from fossil fuel to renewables. Whatever the decision, demonstrating it can extract value from the more than 16-month-long Origin escapade is key. (By Antony Currie)
Follow @Breakingviews on X
Capital Calls – More concise insights on global finance:
Evergrande’s Hong Kong court ruling is big reprieve read more
Saks and Neiman Marcus are better together read more
Geely’s stalled IPO discounts global expansion read more
ASML’s new CEO has tricky path to a 1,000% return read more
Ferrovial ends bumpy Heathrow ride on a high read more
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
