The Origin Energy Ltd (ASX: ORG) share price will be on watch on Tuesday.
That's because the energy giant has just provided an update on its recent takeover approach.
Origin share price on watch following takeover update
All eyes will be on the Origin share price today after the company revealed that it has accepted a revised takeover offer from the consortium comprising Brookfield Asset Management and MidOcean Energy.
According to the release, the parties have entered into a binding scheme implementation deed that will see Origin taken over for $5.78 per share and US$2.19 per share.
Based on an assumed AUD/USD exchange rate of 0.70, this implies a total consideration of $8.912 per share. This values Origin at $18.7 billion and represents a 9.1% premium to where the Origin share price currently trades.
Though, as always, the total consideration payable will be reduced by any dividends paid by Origin prior to implementation of the scheme. This includes the interim 16.5 cents per share fully franked dividend paid to shareholders on 24 March.
So, the true consideration for shareholders is $8.747 after taking that dividend into account.
This will be paid in Australian dollars, with the US dollar component converted to Australian dollars based on the prevailing exchange rate at the time of implementation of the scheme. Though, shareholders can elect to have the US dollar component paid in US dollars.
In addition, Origin has agreed with the consortium that a fully franked special dividend may be paid to shareholders. This will be subject to satisfaction of certain conditions and is to be considered by the board closer to the time.
What's next?
The Origin board unanimously recommends that shareholders vote in favour of the scheme in the absence of a superior proposal, and subject to an independent expert concluding that it is in the best interests of shareholders.
Each Origin director intends to vote all shares they hold or control in favour of the scheme, subject to the same qualifications.
Origin's chairman, Scott Perkins, said:
The Board is unanimous in its view that this transaction is in the best interests of shareholders. The transaction represents a significant premium to the share price prior to the original indicative proposal, and reflects the strategic nature of Origin's platform, its growth prospects and anticipated earnings recovery.
We believe the Consortium will be responsible owners of Origin's businesses. Our discussions with the Consortium confirm a high degree of alignment with Origin's strategy and a desire to accelerate initiatives consistent with Origin's critical role in Australia's energy transition. This alignment validates the vision and hard work of Origin's management team and employees.
