The Origin Energy Ltd (ASX: ORG) share price was among the best performers on the Australian share market in November.
Over the period, the energy company's shares rose an impressive 41.1%.
This compares favourably to the ASX 200 index, which rose 6.1% over the period.
Why did the Origin share price smash the market?
Investors were buying Origin's shares last month after the company received a takeover approach.
Origin received an indicative, conditional, and non-binding proposal from Brookfield Asset Management and MidOcean Energy to acquire the company for $9.00 cash per share. This valued the company at $18.4 billion on an enterprise value basis.
Based on the Origin share price at the time, this represented a sizeable 54.9% premium for investors.
Origin revealed that this was the third bid the company had received from Brookfield Asset Management and MidOcean Energy. It had been in talks since August and had rejected previous offers of $7.95 cash per share in August and $8.70 to $8.90 per share in September.
It seems that $9.00 per share was on the money, with the Origin board revealing that it would be prepared to accept the offer and recommend it to shareholders if it becomes binding.
As a result, the company granted Brookfield Asset Management and MidOcean Energy due diligence access.
What's next?
With the Origin share price trading at $7.95, this represents an 11.7% discount to the offer price.
This appears to indicate that the market is somewhat sceptical that the deal will complete.
This may be due to the various hurdles the deal will have to overcome for completion. These include regulatory approvals such as Foreign Investment Board Review (FIRB) approval.
Credit Suisse commented on this, saying:
Foreign Investment Review Board hurdles loom large for proposed acquisitions of this nature, and the Government could use its approvals leverage to extract concessions on domestic gas prices.
