The Origin Energy Ltd (ASX: ORG) share price is falling on Tuesday.
In morning trade, the energy giant's shares are down 0.5% to $9.09.
Why is the Origin share price falling?
Investors have been selling the company's shares following its quarterly update and news that its largest shareholder plans to vote against its takeover.
In respect to the former, for the three months ended 30 September, Origin delivered a relatively mixed update.
Its integrated gas business reported production that was steady quarter on quarter but up 4% on the prior corresponding period. This was driven by an increased number of wells online and effective well optimisation activity.
However, Australia Pacific LNG revenue for the quarter was 5% lower than the prior quarter at $2,345 million. This was due to the seasonal timing of LNG cargoes and lower realised average LNG prices.
Australia Pacific LNG revenue was 15% lower when compared with the same quarter in FY 2023. This was due to a combination of lower realised oil prices, and lower short-term domestic contract volumes and prices.
Over in the Energy Markets business, electricity sales volumes decreased 6% year on year due to milder weather, increased energy efficiency, and strong solar uptake.
In addition, natural gas sales volumes fell by 21% due to milder weather, lower short-term sales, and a 22% decline in gas to generation.
AustralianSuper says no
Also weighing on the Origin share price is news that the company's largest shareholder is not backing the Brookfield consortium's takeover.
AustralianSuper, which owns a 13.67% stake, disagrees with the assumptions used in the Independent Expert's Report. The super fund explains:
AustralianSuper believes Origin has a highly strategic portfolio of assets to participate in, and benefit from, the energy transition. AustralianSuper is a long-term shareholder in Origin and the Fund's investment process is built around determining the long-term intrinsic value of the companies we invest in on behalf of members.
Our valuation is based on a number of assumptions about the future. The Fund has a different view of key assumptions and other inputs, and therefore the valuation, contained in the Independent Expert's Report (IER) in Origin's Scheme Booklet. The Fund has engaged energy industry experts, Frontier Economics to review the assumptions used in the IER. Frontier Economics are also of the opinion that the assumptions used in the IER to derive a business valuation are unrealistically low.
The super funds conclude:
The current offer from the Brookfield and EIG-backed consortium remains substantially below our estimate of Origin's long-term value. AustralianSuper believes the ongoing energy transition, as we move towards net zero by 2050, has further enhanced the value of strategic energy transition platforms, such as Origin.
