Australia's antitrust regulator will decide the future of one of the country's largest corporate buyouts in 2023 on Tuesday when it rules on whether a Brookfield Corp-led consortium's A$15.35 billion ($9.76 billion) bid for Origin Energy (ORG.AX) will be allowed.
The case has been under consideration by the Australian Competition and Consumer Commission (ACCC) since the consortium lodged an A$8.91 bid per share in March for Australia's second-largest power generator.
The stock closed on Monday at A$8.73 and has not traded above the offer price since the bid arrived, reflecting investors' concerns the ACCC could stop the deal from going ahead.
Brookfield (BN.TO) and Origin Energy declined to comment on the upcoming ACCC decision.
If the deal proceeds, Origin will be broken up into two businesses with its Energy Markets business to be acquired by Brookfield; while U.S. private equity firm EIG's MidOcean Energy, the other consortium partner, would take control of Origin's integrated gas business.
The offer values Origin at A$15.3 billion in equity and A$18.7 billion taking into account its debt levels.
Brookfield's ownership of AusNet Services, which is a Victoria-based transmission company that has electricity and gas distribution networks, has been identified by analysts as a potential concern for the ACCC.
"My view is that the regulated nature of transmission assets would have been enough to allay any concerns but this has been an extended process," said Max Vickerson, research analyst at stockbrokers Morgans.
"If approval isn't granted I suspect the share price will be under pressure in the short term, despite how positive Australian Super and Perpetual are on the value of the company."
Perpetual, a major Australian fund manager and Origin shareholder, has pushed Brookfield and EIG to consider raising their offer to win Origin, according to local media reports.
Pension fund giant AustralianSuper said in September it had raised its Origin stake to just under 14%, as its share price was "substantially below our estimate of its long-term value."
ACCC chair Gina Cass-Gottlieb told Reuters the antitrust regulator was not deal-averse after rejecting three high profile transactions in the past year.
($1 = 1.5733 Australian dollars)
