AustralianSuper is set to reject the $18.7 billion takeover offer from Brookfield and partner EIG for Origin Energy Ltd (ASX:ORG).
The move could force the North American consortium to raise its bid despite the absence of a rival suitor.
AusSuper is Origin’s largest shareholder with a 13.67% holding and is supported by several smaller shareholders.
It said the current offer “remains substantially below our estimate of Origin’s long-term value”.
The superannuation giant has taken issue with an independent expert assessment that said the transaction was within its estimated range for the target.
There is now a risk that the deal – which has already been approved by the target’s board – won’t win the 75% approval it needs at a shareholder vote in November.
AusSuper questions valuation in Origin Energy's takeover bid
AustralianSuper has raised concerns about the valuation multiples used in the takeover bid for Origin Energy by Toronto-based Brookfield and Washington-based EIG.
The major investor commissioned Frontier Economics to review the independent expert report (IER) by Grant Samuel, stating the multiples are "unrealistically low" and "significantly below" those from recent transactions and comparable companies.
Origin's current share price of $9.12 outpaces the $8.81-per-share bid, suggesting a substantial increase would be necessary to gain
Grant Samuel estimates the multiple between FY24 gross earnings and the offer price at 5.8 to 6.5 times, lower than Alinta Energy's recent $1.72 billion deal with APA Group (ASX:APA), which stood at 12.9 times forecast EBITDA for 2023-24.
Macquarie Equities and Kingfisher (LON:KGF) Capital Partners have also deemed the offer price too low, suggesting it needs to be upwards of $10 and $11 per share, respectively.
So far, limited engagement has occurred between Brookfield and AustralianSuper.
Shareholders will vote on the deal on November 23, following an already controversial AGM where the issue of foreign ownership was raised.