Brookfield to consider new Australia energy policy impact if Origin bid fails

SYDNEY, Dec 1 (Reuters) – Brookfield said on Friday it would consider the implications of Australia’s new green energy policy on Origin Energy (ORG.AX) before making a new offer should its $10.6 billion bid for the firm be voted down by the takeover target’s shareholders on Monday.
The government plan announced last week to underwrite a massive expansion of clean energy in the electricity market, where Origin is a major player, has scrambled the outlook for electricity prices, future investment and existing plants.
Brookfield Australia’s head of renewable energy and transition, Luke Edwards, said should the shareholder vote fail, the private equity firm would further examine the government’s proposed expansion to the Capacity Investment Scheme (CIS) and National Energy Transformation Partnership (NETP).
“We will do this work before considering whether to continue pursuing a proposal to acquire Origin Energy or the Origin Energy Markets business,” he said in a statement.
The CIS will set a revenue floor for eligible clean energy projects, which some analysts and investors say could drive a major expansion of clean energy and in doing so, lower electricity prices and squeeze margins at Origin.
Origin’s investors are due to vote on Monday on the Brookfield-led consortium’s bid at A$9.39 per share offer that looks likely to fail without the backing of AustralianSuper, the energy firm’s largest shareholder.
Origin’s board on Thursday rejected an alternative proposal lodged last week from the consortium to be considered if the current offer fails.
“We respect Origin’s decision to cease engagement with the Consortium in relation to our revised proposal,” Edwards said.
Origin declined to comment on the Brookfield statement on Friday.
Reporting by Scott Murdoch and Lewis Jackson in Sydney; Editing by Tom Hogue and Jamie Freed
Our Standards: The Thomson Reuters Trust Principles.
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Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialised in financial journalism for most of his career and covers equity and debt capital markets across Asia and Australian M&A. He is based in Sydney.
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Reports on breaking news in Australia and New Zealand covering the biggest stories across politics, companies and commodities. Previously wrote about equities at Morningstar.