Pension fund AustralianSuper said on Tuesday it plans to vote against a Brookfield-led consortium's A$15.35 billion ($9.78 billion) takeover offer for Origin Energy Ltd (ORG.AX), casting doubt on the future of the bid.
Origin Energy's largest shareholder, the A$300 billion AustralianSuper, owns a 13.68% stake and said the offer was "substantially below" its estimate of long-term value for Australia's biggest energy retailer.
Origin shares were down 0.4% in early trade on Tuesday at A$9.13 each, which was above the $A8.81 offer price.
The deal requires 75% support from the votes cast at a shareholder meeting, meaning AustralianSuper's holding could be enough to scupper the bid if not all shareholders vote.
The high-profile intervention into one of the biggest takeovers this year comes as Australia's A$2.4 trillion pension sector increasingly flexes its muscle at home and overseas thanks to its burgeoning size in financial markets.
Brookfield-consortium's offer price of A$8.81 per share has been deemed fair by an independent expert's report, however, it outlined a "roll forward" calculation that says Origin's shares could be worth an additional 40 Australian cents by the time a potential takeover is due to occur.
The Brookfield-led consortium has given no indications publicly it is considering upping the value of its bid ahead of a shareholder vote planned for 23 November.
However, AustralianSuper is not alone in its reservations over the price. Fund manager Perpetual told media last month the deal undervalued the energy company. Perpetual did not immediately respond to a request for comment.
"No doubt the negotiations between the bidders and key shareholders like AustralianSuper are ongoing," said Max Vickerson, analyst at stockbroker Morgans.
"Given that AusSuper felt the need to go public it suggests that maybe they’re not that close to a deal. It’s hard to say definitively that the takeover won’t happen as someone could still blink before the vote but it’s not a good sign."
Origin shares have been trading above the offer price since the deal got an approval from the country's competition regulator on Oct. 10. Origin shares closed at A$9.17 on Monday, 4.1% above the offer price.
AustralianSuper, which engaged consultancy firm Frontier Economics to review the independent expert's report, said the firm was also of the opinion that the assumptions used to come at a business valuation were "unrealistically low."
The pension fund cited factors including Origin's 27.5% stake in the giant Australia Pacific Liquefied Natural Gas (APLNG) project, which positioned the company to take advantage of strong global demand for the super-chilled fuel.
Origin Energy on Tuesday reported a 5% fall in first quarter revenue from APLNG due to lower natural gas prices.
Brookfield and EIG's MidOcean Energy did not immediately respond to a Reuters request for comment. Origin did not immediately respond to a Reuters request for comment.
($1 = 1.5694 Australian dollars)
