Sept 21 (Reuters) – The top shareholder of Australian takeover target Origin Energy increased its stake on Thursday, calling the shares undervalued, in a move that may complicate a A$15.35 billion ($9.84 billion) buyout led by Canada’s Brookfield.
Pension fund giant AustralianSuper said it raised its holding in Origin, the country’s No. 2 power producer, by one percentage point to just under 14%. That gives the pension fund even more sway over whether the deal goes ahead since it requires support of 75% of votes cast.
“Origin’s current share price is substantially below our estimate of its long-term value and this is why we have increased our holding in the company,” AustralianSuper said in a statement that did not refer to the buyout.
The pension fund did not immediately respond to questions about whether it planned to pressure the company to demand a higher offer.
Origin agreed in March to the offer, one of Australia’s biggest of the year, from a consortium of Brookfield and U.S. investment firm EIG Partners valued at A$8.91 per share.
But Origin’s shares have traded well below that price amid uncertainty over competition issues. Australia’s anti-trust watchdog last week pushed out its decision on the deal by two weeks to Oct. 12.
The shares closed at A$8.70 on Thursday, up 0.4%, against a 1.4% decline on the broader market.
An Origin spokesperson said the company noted AustralianSuper’s “continuing confidence in the future of the business”.
The Brookfield offer was still subject to several conditions, including regulatory approval, and “if those hurdles are met, ultimately all of our shareholders will have the opportunity to have their say via a vote”, the spokesperson added.
The Brookfield consortium declined to comment.
Some other major investors and analysts have said the Brookfield-led offer undervalues the company given the possibility its major coal-fired power plant could stay open longer than planned as well as a strong performance in other assets.
AustralianSuper’s additional stake is worth roughly A$150 million based on Reuters calculations and Origin’s last closing price.
($1 = 1.5601 Australian dollars)
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