The Origin Energy Ltd (ASX: ORG) share price is pushing higher on Tuesday.
In morning trade, the energy giant's shares are up over 1% to $8.25.
This means the Origin share price is now a solid 30% since this time last year, as you can see below.
Why is the Origin share price rising?
Investors have been bidding the Origin share price higher today after the company accepted an $18.7 billion takeover proposal from a consortium comprising Brookfield Asset Management and MidOcean Energy.
The consortium has tabled an offer of $5.78 per share and US$2.19 per share, which equates to a total consideration of $8.912 per share. This represents a 53.4% premium to the Origin share price prior to the first proposal on 9 November 2022.
However, this will be reduced by any dividends paid, including the interim dividend of 16.5 cents per share that was paid last week. As a result, the true consideration for shareholders is $8.747, which is a 6% premium to the current Origin share price.
This appears to reflect the fact that the deal is still subject to a few conditions. This includes shareholder approval, court and regulatory approvals (including FIRB and ACCC approval), and the independent expert's report concluding that it is in the best interests of shareholders.
What's next?
When it comes to the shareholder vote, the Origin board are unanimously recommending that they vote in favour of the scheme. This is in the absence of a superior proposal and subject to the independent expert's report.
Origin's CEO, Frank Calabria, is supportive of the proposal. He said:
The significant premium placed on Origin by the Consortium reflects the value of our strategy and our advantaged position to capture value from the energy transition. We believe this transaction is a great outcome not only for our shareholders, but for all stakeholders including our customers, employees and partners. We believe this transaction also stands to benefit the broader Australian community as it will unlock significant capital that can help accelerate the energy transition and deliver benefits in the form of cleaner, smarter and lower cost energy for our nation over time.
