In today’s briefing:
- Origin Energy (ORG AU): Brookfield/EIG Binding Offer; ACCC Approval the Key Risk
- Origin Energy And Brookfield/MidOcean Enter Into Scheme Deed
- Estia Health: Bain’s Non-Binding Proposal
- Liontown Resources (LTR AU) Turns Down Albemarle’s A$2.5/Share Offer
- United Malt (UMG AU): Malteries Soufflet’s Indicative A$5.00 Offer
Origin Energy (ORG AU): Brookfield/EIG Binding Offer; ACCC Approval the Key Risk
- Origin Energy (ORG AU) has entered into a binding proposal with Brookfield/EIG. The offer terms are changed to A$5.78 and US$2.19 per share. The offer is worth A$8.912 excluding dividends.
- Since the announcement of the first indicative offer on 10 November 2022, the average implied value of the revised offer is A$8.97 per share vs A$9.00 for the previous offer.
- ACCC approval will be the key overhang and is expected to take around six months. At the last close, the gross spread to the offer is 9.1%.
Origin Energy And Brookfield/MidOcean Enter Into Scheme Deed
- In the wake of the Aussie government’s gas price intervention, the Brookfield/MidOcean consortium reduced its Offer for Origin Energy (ORG AU) to ~A$8.90/share, down from A$9.00/share, on the 22 Feb.
- At the time, Origin appeared supportive. Origin and Brookfield/MidOcean have now entered into a Scheme Implementation Deed.
- Some subtle – and more favourable to all investors – changes have been made to terms. Pricing is attractive. ACCC is the big question mark.
Estia Health: Bain’s Non-Binding Proposal
- Aged care provider Estia Health (EHE AU) has appointed UBS to advise on Bain Capital’s $3.00/share non-binding proposal.
- The indicative Offer arrives a little over two months after Kerry Stokes-backed Seven Group Holdings (SVW AU) off-loaded its 10% stake at ~ $2.00/share.
- Separately, Regal Fund announced it has taken a 7% stake.
Liontown Resources (LTR AU) Turns Down Albemarle’s A$2.5/Share Offer
- Liontown Resources (LTR AU) has turned down an unsolicited, conditional and non-binding offer from Albemarle Corp (ALB US) to acquire all outstanding shares at A$2.50/share.
- There is huge short interest on Liontown Resources (LTR AU) and the short covering could take the stock close to the A$2.50/share mark.
- Liontown Resources (LTR AU) is up nearly 50% today and if the price stays around this level, the stock could be added to the S&P/ASX 100 Index in September.
United Malt (UMG AU): Malteries Soufflet’s Indicative A$5.00 Offer
- United Malt Group Ltd (UMG AU) has offered exclusive due diligence to Malteries Soufflet for its non-binding indicative proposal of A$5.00 per share, a 45.3% premium to the undisturbed price.
- The offer follows on from three previous undisclosed proposals. The offer is subject to several conditions such as due diligence, Board recommendation and FIRB approval.
- The presence of several substantial shareholders necessitates an attractive premium. The offer is attractive in comparison to historical share prices and peer multiples.
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